Moody's rates Carestream loans B1

Moody's Investors Service said it affirmed the B1 corporate family rating of Carestream Health, Inc. and assigned a B1 rating (LGD3, 33%) to the proposed $2 billion credit facility including a $150 million first-lien senior secured revolver and a $1.85 billion first-lien term loan.

The outlook is stable.

Proceeds will be used to retire the existing first- and second-lien credit agreements and pay a $200 million dividend to equity sponsor, Onex.

The B1 corporate family rating is supported by the company's leading market position, large revenue base and diversified global operations, the agency said.

Carestream's ratings also benefit from solid demonstrated free cash flow generation and adjusted debt-to-EBITDA ratio that will rise to about 4 times, which is in line with leverage that was incurred in 2007 at the time of the leveraged buyout, according to the agency.

Ratings are constrained by adverse secular trends in the company's traditional film business, the agency noted.

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