Moody's might downgrade Platform

Moody's Investors Service said it placed under review for downgrade Platform Specialty Products Corp.’s B1 corporate family rating and B1-PD probability of default rating, MacDermid Inc.’s B1 (LGD3) senior secured revolving credit facility and term loan and MacDermid Agricultural Solutions Holdings BV’s B1 (LGD3) senior secured term loan. Platform’s speculative grade liquidity rating is unchanged at SGL-2.

The review follows the company's announcement that it agreed to acquire Arysta LifeScience SPC, LLC (B2/stable) for about $3.51 billion, consisting of $2.91 billion in cash and $600 million of new series B convertible preferred stock. To finance the acquisition, Platform has entered into a commitment letter for $1.6 billion of senior secured term loans and $750 million of unsecured bridge loans.

Moody's said the review reflects its concern that the company's leverage will increase following the Arysta acquisition despite the sizable equity contributions already completed and planned for this transaction. The agency predicts that leverage will likely rise above 5 times, exceeding management's previously stated net leverage target of 4.5 times.

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