Moody's rates Platform/MacDermid loans B1

Moody's Investors Service said it affirmed the B1 corporate family rating, B1-PD probability of default rating and SGL-2 speculative grade liquidity rating of Platform Specialty Products Corp. following the company's announcement that it is raising $405 million of additional debt to fund the acquisition of Chemtura's AgroSolutions business. The outlook is stable.

The acquisition funding was rated B1 (LGD3) and includes a $130 million add-on first-lien senior secured term loan due 2020 to be borrowed by MacDermid Inc. and a $275 million euro equivalent senior secured term loan due 2020 to be borrowed by MacDermid Agricultural Solutions Holdings BV and Netherlands Agricultural Investment Partners, LLC.

Moody’s also affirmed the B1 (LGD3) ratings on MacDermid’s $755 million first-lien term loan facility due 2020 and its $150 million revolving credit facility due 2018, which was upsized from $50 million.

In addition to the $405 million of new debt, Platform's $1 billion acquisition of AgroSolutions will be funded with $300 million of cash from the balance sheet, $287 million of cash raised through a private issuance of public equity completed in May and $54 million of equity.

The affirmation of the B1 corporate family rating reflects Moody's expectation that Platform's pro forma leverage will not increase significantly to finance the AgroSolutions acquisition; the ratio of pro forma debt to EBITDA is 4.2 times for the last 12 months ended March 31.

The agency said the B1 rating reflects the diverse revenue stream, strong margins and cash flow generating capabilities of the combined businesses, which benefit from geographic, operational and product diversity through its global footprint.

The rating is tempered by elevated event risk due to Platform's stated strategy as an acquirer of specialty chemical companies, which may increase the company's leverage, and by the company's moderate size, Moody’s said.

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