Moody's slashes Pronovias

Moody's Investors Service said it downgraded the corporate family rating of CatLuxe Acquisition Sarl (Pronovias) to Ca from Caa2, and the company's probability of default rating to C-PD from Caa2-PD. Concurrently, the agency sliced the ratings of CatLuxe Sarl's senior secured bank credit facilities, consisting of a €215 million senior secured term loan B and a €45 million senior secured revolving credit facility to Ca from Caa1.

On Dec. 20, the company reported that owner BC Partners and the company’s lenders led by Bain Capital agreed to recapitalize the Pronovias in a process expected to be completed by the end of March

A new senior secured loan of about €110 million will serve to refinance existing bridge loans and will improve the company's liquidity, with about €40 million of cash flows injected into the business and about €20 million in cash on the balance sheet at closing.

The senior secured bank credit facilities lenders will become the majority shareholders of Pronovias and will receive a new €78 million PIK loan stapled to equity and subordinated to the planned new money senior secured loan. “Based on these transaction terms, which also include the full equitization of the current second-lien debt and shareholder loan, Moody's considers that a Ca CFR and a Ca rating in respect of the existing senior secured bank credit facilities are appropriate,” the agency said in a press release.

The outlook remains negative on both entities.

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