Moody's assigns B2 to Saverglass, loans

Moody's Investors Service said it assigned a first-time B2 corporate family rating and a B2-PD probability of default rating to Olympe SAS, the ultimate parent of Saverglass SAS. Concurrently, the agency gave B2 ratings to the planned senior bank credit facilities including a €500 million guaranteed senior secured term loan B due 2029, a €60 million guaranteed senior secured capex facility due 2029 and a €70 million guaranteed senior secured revolving credit facility due 2028.

"The B2 rating assigned to Saverglass is supported by the company's leading position as manufacturer of glass bottles for premium spirits and wines, its global presence and a relatively sticky customer base, and the positive fundamentals underpinning the premium beverage industry, which supports the company's growth strategy," said Donatella Maso, a Moody's senior analyst, vice president and lead analyst for Saverglass, in a press release.

"However, the rating also reflects the company's high leverage of around 6.2x pro forma for the dividend recapitalization, the expectation of negative free cash flow owing to significant investments in new capacity and upgrades of existing furnaces, its exposure to input costs inflation and currency volatility, and a degree of cyclicality of its end markets," added Maso.

Term loan proceeds together with about €25 million of balance sheet cash will be used to refinance debt, distribute €100 million of dividends to shareholders and pay transaction fees. The refinancing will push the company's debt maturities to 2028.

The outlook is stable.

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