Fitch rates Emerald loans BBB-, BB+

Fitch Ratings said it assigned expected BBB-/RR2 ratings to Copeland’s (Emerald Debt Merger Sub LLC) planned $700 million asset-based lending revolver and expected BB+/RR2 ratings to its planned $2.25 billion term loan. Both will be due 2028.

Fitch also assigned Copeland an expected BB issuer default rating. Blackstone Capital Partners formed Emerald to acquire Copeland, Emerson Electric Co.’s climate technologies business. The issuer is expected to become Emrld Borrower LP, a newly formed entity owned by Blackstone and Emerson, after the acquisition is completed. The outlook is stable.

“Emerald's IDR reflects Fitch's expected pro forma post-acquisition credit profile of Copeland. Copeland's credit profile is supported by its leading market position in HVACR compressors and a cash flow risk profile that is comparable to BBB category peers. The ratings are mainly constrained by its financial profile, with Fitch-calculated EBITDA Leverage of mid/low-4x through FYE2024, consistent with BB rating tolerances,” the agency said in a press release.

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