Moody's rates Beverage Packaging loan Ba2

Moody's Investors Service said it assigned B1 corporate family and probability-of-default ratings to Beverage Packaging Holdings I SA and a provisional Ba2 rating (LGD2, 22%) to its €825 million senior secured credit facilities. The agency also assigned a provisional B2 rating (LGD5, 72%) to €450 million senior notes and a provisional B3 rating (LGD6, 92%) to the €320 million senior subordinated notes, both issued by Beverage Packaging Holdings (Luxembourg) II SA.

The outlook is stable.

The corporate family rating reflects the issuer's revenue visibility underpinned by long-term supply contracts. It is further supported by stable end markets, by long-term relationships with leading customers in the beverage and food industries, the recognized technology and product know-how and by an experienced management team, Moody's said.

The B1 rating reflects Combibloc's role as the main profit contributor of the group, the large exposure to Europe, the threat of substitution from other packaging substrates as well as the volatile raw material prices and possible loss of competitiveness if not managed appropriately, the agency said.

Moody's said the credit metrics are weak for the assigned B1 rating category but mitigated by a relative strong business model and potential for fast improvements following the targeted debt reduction.

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