Moody’s gives B1 to Axalta notes

Moody’s Investors Service said it assigned a B1 rating to the planned dollar-denominated notes to be sold by Axalta Coating Systems Dutch Holding BBV and changed the outlook for its parent Axalta Coating Systems Ltd. to positive from stable.

The agency also affirmed Axalta’s Ba3 corporate family rating and Ba3-PD probability of default rating. Concurrently, Moody's affirmed the Ba1 ratings on the senior secured first-lien revolver, the senior secured first-lien term loan B5 and the B1 rating on the backed euro senior unsecured notes of Axalta Coating Systems Dutch Holding. Finally, Moody’s affirmed the B1 rating on the dollar-denominated senior unsecured notes issued at wholly owned subsidiary Axalta Coating Systems, LLC.

The notes will be used to fund the repayment of Axalta’s euro senior unsecured notes maturing January 2025.

"Axalta's credit metrics have improved in 2023 as price increases have been passed through and raw materials prices have declined, so profits are up despite a decline in volumes due to destocking and a relatively soft macroeconomic environment," said John Rogers, a Moody's senior vice president and lead analyst for Axalta, in a press release.

Rogers added, "On the third-quarter call, the company announced a new lower leverage target, which will result in a meaningful reduction in its term loan debt over the next two years."

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