Moody’s lifts Ontex CFR to Ba3

Moody's Investors Service said it upgraded Ontex Group NV's corporate family rating to Ba3 from B1 and probability of default rating to Ba3-PD from B1-PD.

At the same time, the agency assigned a definitive Ba3 from provisional Ba3 instrument rating to the €250 million senior secured notes, the €380 million first-lien facility and the €100 million revolving credit facility issued by Ontex Group NV, with a stable outlook.

The senior proceeds from the secured notes due 2021 and the first-lien facility due 2019 together with €45 million cash from balance sheet will be used to repay the existing debt and to pay transactions costs.

Until the notes at Ontex IV SA's level are withdrawn, Moody's said it confirmed their rating of Ba3 for the €395 million senior secured notes due 2018 and B3 for the €235 million senior unsecured notes due 2019.

Moody’s said the upgrade was prompted by the successful execution of the €730 million refinancing of Ontex's debt facilities through the issuance of the new senior secured notes, first-lien facility and revolver. The refinancing has substantially lowered the company's cost of debt and therefore improves free cash flow generation and interest coverage, and extends the debt maturity profile to 2019.

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