Moody’s ups, assigns Cambrex loan B2

Moody’s Investors Service said it upgraded Cambrex Corp.’s corporate family and probability of default ratings to B2 and B2-PD from B3 and B3-PD, respectively, and assigned a B2 rating its proposed incremental first-lien term loan.

“The CFR upgrade to B2 reflects Cambrex’s strong operating performance, which will be boosted by contributions from supplying active pharmaceutical ingredients (API) for an available Covid-19 therapy, at least for the next several months. Cambrex is also on track to fully realize roughly $20 million in cost savings in 2020 that it identified at the time of its LBO in late 2019. Moody’s expects that Cambrex will maintain debt/EBITDA at or below 6x for the next 12-18 months,” the agency said in a press release.

Loan proceeds and a portion of balance sheet cash will be used to repay Cambrex’s second-lien term loan. Once repaid, Moody’s will withdraw the ratings on the second-lien term loans.

Moody’s also affirmed the B2 rating on Cambrex’s first-lien senior secured term loan and revolver. “The affirmation of the B2 ratings for the existing first-lien senior secured credit facilities reflects the reduction in junior debt that provides loss absorption in the capital structure after the proposed refinancing transaction closes,” the agency said.

The outlook is stable.

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