Moody’s affirms Coveris after add-on

Moody’s Investors Service said it affirmed the Caa2 rating on Coveris Holdings SA’s senior unsecured notes due November 2019, including the company’s $155 million add-on.

The agency also said it affirmed the company’s B3 corporate family rating, B3-PD probability of default rating and other instrument ratings.

The outlook remains stable.

The actions follow news that the company would complete the add-on of $155 million to its existing 7 7/8% senior unsecured notes due November 2019.

The proceeds from the additional notes will used to finance two acquisitions and pay related fees, Moody’s said.

The add-on senior notes are expected to have substantially the same terms as the existing notes including the maturity date, the agency said.

The ratings reflect the company’s reliance on synergies to generate positive free cash flow, concentration of sales and challenging competitive environment, Moody’s said.

The ratings also consider the company’s financial aggressiveness, primarily commoditized product line and significant percentage of business that is not under contract with cost pass-through provisions, the agency said.

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