Moody's gives Cullinan, notes B1

Moody’s Investors Service said it gave B1 ratings to Cullinan Holdco SCSp and its planned Cullinan Holdco SCSp. Cullinan is an intermediate holding company of AS Graanul Invest following the expected acquisition by Apollo Global Management.

Cullinan’s B1 rating reflects its market position, revenue stability, the demand for more environmentally friendly energy mix, its historically solid and reasonably stable profitability among other factors. However, the rating is constrained by the firm’s small size, high operational concentration on a single product, its high leverage, exemplified by its Moody's-adjusted gross debt/EBITDA of 5.2x as of June 30 pro forma for the notes, with the expectation of a rapid reduction on the back of production capacity expansion and operational improvements over the next two years and other factors, the agency said.

After the bond sale, Cullinan’s next debt maturity will be 2026. Moody’s said it does not expect the company to make any significant draws on its $100 million super senior revolver over the same period.

The outlook is stable.

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