Moody's gives Gerflor, loan B2

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to Hestiafloor 2 (Gerflor). Moody's also assigned a B2 rating to the senior secured €850 million term loan B with seven years tenor and to the senior secured €125 million revolving credit facility with 6.5 years tenor. The outlook is stable.

The new financing, in combination with common equity, will be used to fund the leverage buyout of the company by Cobepa which will control a majority stake alongside ICG, the previous majority shareholder and management. The sale is conditional upon regulatory clearance and is expected to close this month.

Moody's adjusted opening leverage is 6.5x at December 2019 pro forma for the transaction and the full-year effect of acquisitions, but before any future synergies and expected cost savings. While the initial leverage is high for a B2 rated company, Moody's said it forecasts leverage to decline to below 6x in the next 18 months.

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