Moody's gives Manuchar B2, bonds B3

Moody's Investors Service said it gave a B2 corporate family rating and a B2-PD probability of default rating to LSF XI Magpie Bidco BV/SRL (Manuchar NV), and a B3 instrument rating to its planned €350 million of senior secured notes.

“The assigned B2 CFR reflects Moody's expectation that Manuchar's gross leverage, as adjusted and defined by Moody's, will be around 5x over the next 12 to 18 months after closing of the proposed debt issuance, higher than the pro-forma starting gross leverage for the new capital structure of 3.3x for the last 12 months ended March 2022. Earnings for the last 12 months were exceptionally strong, especially for the company's chemical distribution business unit, mainly because the company was able to deliver chemicals to customers while underlying demand was strong and supply of chemicals was constrained given the ongoing global supply chain disruptions,” the agency said in a press release.

The proceeds will be used primarily to finance Lone Star's purchase of Manuchar, refinance debt, pay for transaction-related fees and finance general corporate purposes. Added sources of funding include a cash contribution from Lone Star and rolled-over equity from the management team.

The outlook is stable.

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