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Moody’s rates Milacron loan B2
Moody's Investors Service said it assigned a B2 rating to Milacron LLC's proposed senior secured term loan due 2023, the proceeds of which are expected to refinance the senior secured term loan due 2020 and redeem the senior unsecured notes due 2021.
At the same time, the agency affirmed Milacron Holdings Corp.'s corporate family rating at B2 and probability of default rating at B2-PD.
Moody's upgraded the speculative grade liquidity rating to SGL-2 from SGL-3.
The ratings on the term loan due 2020 and the unsecured notes due 2021 are unaffected at this time, in anticipation of transaction close, upon which these ratings will be withdrawn.
The outlook is stable.
Moody's said it believes the proposed refinancing is credit positive as it will reduce annual cash interest expense by about $15 million and extend debt maturities by two to three years. The increase in required annual term loan amortization is more than covered by the reduction in interest and also ensures that a larger share of cash flow is used to pay down debt.
The agency said it nevertheless affirmed the B2 corporate family rating because total debt and leverage are unchanged, and the incremental cash flow is not meaningful enough to mitigate the operating risks.
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