Moody’s gives Axilone B3, rates facilities

Moody's Investors Service said it assigned a B3 corporate family rating and B3-PD probability of default rating to CCP Lux Holding Sarl, the parent of Axilone.

Concurrently, the agency assigned a B2 instrument rating to the new €265 million senior secured term loan B due 2025 and the new €50 million senior secured revolving credit facility due 2024, and a Caa2 instrument rating to the new €90 million senior secured second lien term loan due 2025, all borrowed at CCP Lux.

The outlook is stable.

Transaction proceeds will be used to fund the acquisition of Axilone by Citic Capital, with the transaction having closed during January.

Moody’s said the B3 corporate family rating reflects the Moody's-adjusted debt/EBITDA of 5.9 times expected for year-end 2017, pro-forma for the transaction, and the agency’s expectation of a broadly similar level for 2018.

It also reflects: (a) The relatively focused product portfolio, concentrated customer base and resulting limited scale of the business in the context of other rated peers; (b) the exposure to a competitive and cyclical end market reliant on new launches with sometimes short product lifecycles; and (c) and the challenge to maintain performance and sustain its recent rapid growth trajectory, the agency explained.

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