Moody's upgrades Zep credit facilities

Moody's Investors Service said it raised Zep Inc.'s first-lien senior secured revolving credit facility and term loan ratings to B2 from B3, and the second-lien term loan rating to Caa2 from Caa3. The agency also confirmed the Caa1 corporate family rating and Caa1-PD probability of default rating.

The outlook is stable. These actions conclude the review for upgrade started on Sept. 30, Moody’s said.

“Moody's originally placed Zep's ratings under review for upgrade on Sept. 30, 2021, based on the expectation that the Zep Vehicle Care (ZVC) divestiture would result in meaningful cash proceeds to Zep and that the company would use the bulk of the net proceeds for debt repayment. Following the completion of the ZVC divestiture, the company used the vast majority of the $371 million net sale proceeds to repay the first-lien term loan and a small amount of the second-lien term loan,” the agency said in a press release.

Moody’s said it raised the loans’ ratings by a notch to reflect the improved recovery prospects under a reorganization scenario.

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