Moody's cuts Milacron; rates loan B1, notes Caa1

Moody's Investors Service said it lowered Milacron Holdings Inc.'s corporate family rating to B2 from B1 and probability of default rating to B2-PD from B1-PD.

The action concludes a review for possible downgrade that was announced on Feb. 12 and incorporates financing arranged for the C$975 million acquisition of Mold-Masters Ltd. of Canada.

The agency confirmed the B1 (LGD updated to LGD-3, 32%) rating of $275 million of existing secured notes of Milacron LLC and assigned ratings to two new obligations of Milacron LLC; B1 (LGD-3, 32%) to a $245 million secured term loan and Caa1 (LGD-5, 80%) to a new unsecured note issue.

The outlook is stable.

Moody's said the one rating notch uplift of the $275 million note and $245 million term loan above the underlying corporate family rating reflects the expected loss from the application of the B2-PD probability of default, higher recovery rates flowing from their secured status and a substantial amount of junior debt in the capital structure which effectively serves as a loss absorption cushion.

The Caa1 rating on the unsecured notes reflects their higher expected loss from the application of the same probability of default and effective subordination of claims to the senior secured obligations.

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