Moody's downgrades Axilone first-lien debt

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

Axilone is a packaging company focused on mostly premium lipstick, fragrance and skincare end markets, Moody's explained.

The agency also said it downgraded the instrument ratings to B3 from B2 for the senior secured bank facilities as a result of the refinancing of the second-lien bank facilities with upsized first-lien debt, all borrowed at CCP Lux Holding.

The outlook is stable.

The ratings reflect the strong performance of Axilone in 2018, including 5.5% of revenue and 6.3% of estimated reported EBITDA growth, Moody's said.

As a result, the company's adjusted debt-to-EBITDA is estimated at 6x for 2018, before annualization of the ShiHong acquisition, the agency said.

The company has the potential to further de-leverage to the 5.5x if growth continues over the coming 12- to 24-months, Moody's said.

The ratings are solidly positioned, the agency added.

Growth in 2018 was supported by both rebuy orders and new launches while product mix also supported EBITDA margin growth, Moody's said.

The ratings also reflect the relatively focused product portfolio, concentrated customer base and resulting limited scale of the business in the context of other rated peers, the agency said.

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