Moody’s reviews Labco for upgrade

Moody's Investors Service said it placed the B2 corporate family rating, B2-PD probability of default rating and the B3 rating on the 8˝% €700 million senior secured notes issued by Labco SA due Jan. 15, 2018 on review for upgrade.

The action follows the April 8 announcement that Labco registered its "document de base" with the French Financial Markets Authority (Autorite des marches financiers), effectively filing for an initial public offering (IPO). Labco expects the IPO on the regulated market of Euronext Paris to close in the first half of 2015, subject to market conditions and regulatory approvals.

"We are placing Labco's ratings on review for upgrade because the intended use of the proceeds from the IPO is to repay part of the outstanding notes which will reduce the company's financial leverage and strengthen free cash flows due to lower interest expenses," Andrey Bekasov, Moody's assistant vice president and lead analyst for Labco, said in a news release.

"We estimate that Moody's adjusted debt-to-EBITDA will decline to around 3.9x in 2015 from 5.8x in 2014 on a pro forma basis."

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