Moody's gives B1 rating to Lune

Moody's Investors Service said it gave a B1 corporate family rating and a B1-PD probability of default rating to Lune Holdings Sarl (Kem One). Concurrently, the agency assigned a B2 instrument rating to the planned €450 million of senior secured notes due 2028.

Moody’s pointed out the B1 CFR considers Kem One's strong PVC market position in Western Europe with leading market share in France and Italy, its backward integration into salt and chlorine and good access to the Mediterranean Sea through its locations in the Rhone Valley and its good liquidity with €106 million starting cash and access to an undrawn €100 million committed revolving credit facility among other pluses.

However, the rating also reflects the company’s focus on Western Europe, its PVC end market on building, construction, infrastructure, ethylene feedstock concentration and exposure to commoditized products which results in volatile operating performance along with other issues, Moody’s noted.

The proceeds and an equity contribution will be used to finance the acquisition of K1 Group SAS and its subsidiaries, part of Kem One's perimeter, as well as to repay a shareholder loan and associated transaction fees.

The outlook is stable.

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