Moody’s assigns Care BidCo B3

Moody’s Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to Care BidCo SAS, the new parent company of Cooper Consumer Health.

Concurrently, Moody’s gave a B2 rating to the planned €920 million senior secured first-lien term loan B due 2028 and €160 million senior secured revolving credit facility maturing in 2027 and a Caa2 rating to the €235 million second-lien term loan maturing in 2029, all to be issued by Care BidCo. Moody’s assigned a stable outlook.

“The debt facilities benefit from pledges over shares, material bank accounts and intercompany receivables and benefit from guarantees by certain subsidiaries representing at least 80% of the group’s EBITDA,” Moody’s said in a press release.

The new ratings follow Cooper’s planned acquisition by CVC Capital Partners’ funds with other investors, including the current shareholder Charterhouse, which will reinvest part of proceeds, maintaining a minority stake in Cooper.

The acquisition will be funded with the proposed €1.155 billion of new debt and a nearly €1.1 billion equity contribution. About €400 million of equity will enter the restricted group as a shareholder loan the agency said it assumes will be eligible to receive equity credit.

As part of the deal, Cooper plans to repay its debt, including the €776 million senior secured term loan due 2025, borrowed by different group entities, and the currently undrawn €60 million senior secured revolving credit facility due 2024. The ratings on the existing instruments, together with the B2 CFR and the B2-PD PDR of the Cooper group’s parent, Alpha Bidco SAS, will be withdrawn upon repayment after the refinancing.

“The stable outlook on the rating reflects Moody’s expectation that Cooper will maintain its trajectory of continued revenue and EBITDA growth, with leverage trending towards 7.5x already in 2022,” the agency said.

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