Moody's rates Concordia loans Ba3, notes Caa1

Moody's Investors Service said it assigned a B2 corporate family rating, a B2-PD probability of default rating and an SGL-2 speculative grade liquidity rating to Concordia Healthcare Corp., Ba3 (LGD2) ratings to its $650 million senior secured term loan due 2022 and $100 million senior secured revolving credit facility expiring in 2020 and a Caa1 (LGD5) rating to its senior notes due 2023. The outlook is stable.

The proceeds will be used, along with equity, to fund the $1.2 billion acquisition of substantially all of the assets of Covis Pharma Holdings Sarl (B3/under review) and to refinance existing debt.

The agency said the B2 corporate family rating of Concordia reflects its small size, its limited operating history and the significant leverage being incurred to fund the acquisition of assets from Covis, with pro forma 2014 adjusted debt to EBITDA of about 5.9 times.

The rating is supported by the company's extremely high profit margins, low cash taxes and low capital expenditures and by the relatively stable, albeit declining, revenue and profit generated by most legacy brand products, Moody’s said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.