Moody’s rates Care Bidco loans B2, Caa2

Moody's said it assigned B2 instrument ratings to Cooper Consumer Health SAS (formerly Care Bidco) €1.105 billion add-on to the senior secured first-lien term loan B2 and to the €135 million add-on to the senior secured first-lien revolving credit facility maturing in 2028, and gave a Caa2 rating to the €112 million add-on to the senior secured second-lien term loan maturing in 2029.

The agency also affirmed the issuer’s B3 corporate family rating and B3-PD probability of default rating.

Cooper will use the proceeds to buy the over-the-counter portfolio of Viatris for $1.64 billion. The acquisition and associated costs will be funded through a combination of €473 million of equity and an additional €1.217 billion of debt, including the non-fungible add-ons to the senior secured €1.105 billion first lien term loan B and to the €112 million senior secured second-lien term loan. Additionally, the company will also boost its revolver by €135 million to €295 million.

"The acquisition will improve Cooper's business profile as it will double its size, broaden its product portfolio with well-established complementary brands, and enhance its geographical diversification. However, the transaction is subject to execution and integration risks, given the size of the acquired asset relative to Cooper and will also result in a temporary increase in gross leverage," said Michel Bove, a Moody's AVP and lead analyst for Cooper, in a press release.

"We expect Cooper's operating performance and credit metrics to improve once the integration process is completed, supported by the company's track record of successful integration of bolt-on acquisitions; profitable growth, free cash flow generation and demonstrated capacity for deleveraging," Bove added.

The outlook remains stable.

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