Moody’s rates Solenis, facilities

Moody's Investors Service said it assigned B2 ratings to Solenis International LP's (B3 corporate family rating, stable) proposed $1.25 billion senior secured first-lien term loan due 2025 and $200 million senior secured revolving credit facility due 2023, as well as a Caa1 rating to the proposed $400 million senior secured second-lien term loan due 2026.

The proposed first- and second-lien debt instruments will be borrowed by a number of entities including Solenis Holdings 1 LLC, Solenis Holdings 2 LLC, and Solenis Holdings 3 LLC, and will be guaranteed by Solenis International LP.

Term loan proceeds will be used to repay Solenis' existing term loans, after the May 3 announcement that BASF will sell its paper and water chemicals business to Solenis in exchange for a 49% equity stake in the combined company. The transaction, is expected to close at the end of 2018.

The B2 ratings on the first-lien facilities are rated one notch above the company’s B3 corporate family rating, reflecting their preferential position in the capital structure and the loss absorption cushion provided by the senior secured second-lien term loan and other unsecured obligations, Moody’s explained.

The first-lien senior secured credit facilities reflect a first-lien security interest on domestic and certain international assets.

Solenis' second-lien senior secured credit facility due 2026 is rated Caa1, one notch below the B3 corporate family rating, due to the effective subordination to the first-lien senior secured credit facilities, the agency added.

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