Moody's rates Lincoln Finance notes B1

Moody's Investors Service said it assigned a long-term debt rating of B1 with a stable outlook to the backed senior secured notes issued by Lincoln Financing Sarl, which will be used refinance the senior secured notes of Lincoln Finance Ltd.

In February 2016, Lincoln Finance Ltd. issued five-year senior secured notes, the proceeds of which were used to finance part of the 100% acquisition of LeasePlan Corp. NV by a consortium of investors comprising pension funds, sovereign wealth funds and private equity funds, Moody's said.

The new notes are guaranteed by Lincoln Finance and benefit from a pledge over the shares of LP Group BV, the direct 100% owner of LeasePlan, the agency said.

The notes also benefit from an interest reserve account that maintains a minimum of 2.5 years of coupons, Moody's added.

The rating reflects the deeply subordinated position of the instrument and high expected loss-given-failure, along with the fact that LeasePlan could be constrained in its ability to pay dividends, a credit negative for the company's creditors as such dividend payments are used to service their debt, the agency explained.

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