Moody's might upgrade Ontex, rates debt Ba3

Moody's Investors Service said it assigned provisional Ba3 ratings to Ontex Group NV’s €250 million senior secured notes due 2021, €380 million first-lien credit facility due 2019 and €100 million revolving credit facility. The outlook on these ratings is stable.

The agency also moved the B1 corporate family rating and the B1-PD probability of default rating to Ontex Group from Ontex IV SA and placed these ratings, along with Ontex IV’s Ba3 senior secured debt rating and B3 senior unsecured debt rating, on review for upgrade.

The proceeds from the new notes and first-lien facility together with €45 million of cash from the balance sheet will be used to repay the existing debt.

If the refinancing transaction concludes as envisaged, Moody's expects to upgrade the corporate family rating to Ba3. The agency said the proposed refinancing is expected to substantially lower the company's cost of debt and therefore improve its free cash flow generation and its interest coverage and extend the debt maturity profile to 2019.

In addition, the ratings take into account Ontex's strong market position, track record of profitability improvement, recent solid trading and good liquidity profile, Moody’s said.

However, the ratings also incorporate the company's exposure to commodity price fluctuations, the price-competitive nature of its industry, customer concentration and exposure to foreign-exchange rate movements, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.