Moody's: Wilsonart add-on is credit negative

Moody's Investors Service said Wilsonart LLC's proposed $100 million term loan add-on to its existing first-lien facility is credit negative as it can lead to future leverage increases.

The transaction has no impact on the company's ratings, including its B2 corporate family rating, B2-PD probability of default rating, B2 rating on senior secured term loan and revolving credit facility.

The stable outlook is unchanged.

The $100 million first-lien term loan add-on will have identical terms to the company's existing first-lien credit facility, including its maturity in December 2023, Moody's said.

It will raise the term loan balance to $1.27 billion at close, the agency said.

The financing proceeds will be used to retire about $97 million of outstanding borrowings under Wilsonart's $175 million revolver expiring in 2021, thus resulting in no debt leverage implications in the near term, Moody's said.

This transaction also relieves revolver capacity for future borrowings, which could lead to subsequent leverage increases with respect to utilizations either for working capital or for acquisitions, the agency said.

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