Moody's gives Multi Packaging loans Ba3, notes Caa1

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to Multi Packaging Solutions, Inc. (New) (initially Mustang Merger Corp.) on its proposed $640 million leveraged buyout.

Moody's also assigned Ba3 ratings to the $278 million proposed senior secured term loan and $50 million revolver, as well as a Caa1 rating to the $200 million proposed senior unsecured notes.

The outlook is stable.

Proceeds from the new debt, $22 million of rolled foreign debt and $160 million equity contribution will fund MPS' buyout by Madison Dearborn Partners from current owner Irving Place Capital and refinance existing debt.

Moody's said the Ba3 ratings on the proposed senior secured term loan and revolver reflect their first priority lien on substantially all U.S. assets, a pledge of 65% of the voting stock of all material foreign subsidiaries and upstream guarantees by all existing and future domestic wholly owned subsidiaries. The ratings also benefit from the loss absorption provided by the $200 million senior unsecured notes.

The Caa1 ratings on the senior unsecured notes reflect their subordinated position in the capital structure and the same guarantees as the senior secured facilities, the agency said.

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