Moody's rates Ortho-Clinical loan B1

Moody's Investors Service said it assigned a B1 (LGD 3) rating to Ortho-Clinical Diagnostics SA's $350 million senior secured revolving credit facility due in 2021.

Ortho's senior secured first-lien term loan due 2021, also rated B1, will be upsized by $200 million, the agency said.

The proceeds will be used to refinance existing revolver borrowings and push out the expiration by two years.

The transaction is credit positive because it alleviates some of Ortho's near-term liquidity pressures, Moody's said.

However, the transaction has no impact on Ortho's other existing ratings, including its B3 corporate family rating, B3-PD probability of default rating, B1 senior secured credit facility ratings and Caa2 senior unsecured note ratings.

The outlook remains negative.

The ratings reflect an expectation that the company will continue to operate with very high financial leverage, Moody's said.

The agency said it estimates that pro forma adjusted debt-to-EBITDA ratio will decline modestly to about 7.5x over the next 12- to 18-months, down from 7.7x as of Jan. 1, 2017

The ratings also consider Ortho's challenging liquidity situation, Moody's added.

Tempering these challenges are Ortho's large scale and good diversity by customer, product and geography, the agency said.

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