Moody's rates Belvedere notes B1

Moody's Investors Service said it assigned a provisional B1 corporate family rating to Belvedere SA and a provisional B1 rating to its proposed issuance of €300 million senior secured floating-rate notes due 2013. The outlook is stable.

In April, Belvedere acquired a 69% stake in Marie Brizard & Roger International from Duke Street Capital and is in the process of tendering for the remaining shares with the intention to eventually de-list the company. Total consideration for Marie Brizard & is estimated at €400 million, including €93 million of existing debt at Marie Brizard & Roger, which Belvedere is part financing through the proposed senior notes offering. The remainder is being financed through the issuance of €84 million OBSAR convertible notes and €76 million in equity from shareholder CL Financial Ltd.

The agency said the ratings reflect financial risks from its highly leveraged capital structure with debt to EBITDA of 6.8x, operational and execution risks associated with the acquisition and the likelihood of ongoing acquisition risk as well as ambitious growth plans including expanding to Russia and the United States as well as plans for vertical integration of drinks distributors in Poland.

On a positive note, Moody's said the ratings reflect the group's leading positions in the vodka and wine markets in Poland, Lithuania and Bulgaria and strong niche market positions in France, significantly improved diversification of revenue and EBITDA generation as a result of the acquisition as well as growth and a financial profile that benefits from stable and recurring revenues and cash flow generation.

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