Moody’s rates GCP revolver Ba2, notes B1

Moody’s Investors Service said it assigned a Ba2 rating to the proposed $350 million first-lien senior secured revolving credit facility due 2023 and a B1 rating to the proposed $350 million senior notes due 2026 of GCP Applied Technologies Inc.

GCP's Ba3 corporate family rating, Ba3-PD probability of default rating and other instrument ratings remain.

The outlook is stable.

The proceeds from the $350 million new notes and $50 million to be drawn from the new revolving credit facility along with about $185 million of cash on hand will be used to refinance the existing revolver and the notes as well as pay fees and expenses related to the transaction.

"GCP's proposed refinancing of its existing $525 million senior notes by the proposed $350 million notes will reduce gross debt leverage and lower interest expenses, mitigating the impact of its narrower business focus after the disposal of Darex in 2017,” Jiming Zou, Moody's vice president and lead analyst for GCP, said in a news release.

“However, the Ba3 CFR continues to reflects our expectation that the company will pursue bolt-on acquisitions to diversify its business and keep its adjusted debt/EBITDA in the range of 3 to 4 times in the medium to long term.”

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