Moody's rates Kloeckner Pentaplast loans Ba3, notes Caa1

Moody's Investors Service said it assigned a B2 corporate family rating and probability of default rating to Kloeckner Holdings SCA, the ultimate holding company of Klockner Pentaplast, following a recent financial restructuring.

Concurrently, Moody's assigned a Ba3 (LGD 3, 31%) rating to the group's senior debt, consisting of a $65 million revolving credit facility due 2016; and term loan B of $435 million due 2016.

In addition, Moody's assigned a provisional Caa1 (LGD 5, 85%) rating to the proposed €255 million second-lien notes maturing 2017 to be issued by KP Erste Germany GmbH. The equity contribution will be made in the form of subordinated, long-dated preferred equity certificates (PECS) and tracking preferred equity certificates (TPECS), which Moody's has deemed to be 75% equity-like and 25% debt-like in its metrics calculation.

The outlook is stable.

The assigned B2 corporate family rating reflects the group's high financial leverage with debt/EBITDA as adjusted by Moody's of 6.4x on a pro forma basis based on the new capital structure, which positions Klockner Pentaplast initially weakly in its rating category.

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