Moody’s ups Kiloutou, rates notes B1

Moody's Investors Service said it raised its ratings for Kiloutou (Kapla Holding SAS), including the corporate family rating to B1 from B2 and the instrument ratings of the backed senior secured notes due 2026 and 2027 to B1 from B2. The agency also changed the outlook to stable from positive. Moody's also assigned a B1 instrument rating to Kiloutou's planned backed senior secured floating-rate notes. It will sell at least €250 million but could upsize the offering, depending on market appetite and pricing.

“The upgrade of Kiloutou's CFR reflects the company's continued strong operating performance in 2022 and year to date 2023, driven by volume growth (also supported by acquisitions) and price increases despite a softening market environment. Leverage (Moody's adjusted debt/EBITDA) has reduced to 4.1x for the last 12 months (LTM) September 2023 from 4.4x as of the end of 2022,” the agency said in a press release.

The proceeds will be used to repay the €200 million of floating-rate notes due in 2027 and revolving credit facility drawings. If the amount is upsized, the proceeds could be used to refinance up to €400 million of floating-rate notes due in 2026, via an exchange into the new notes.

“The stable outlook reflects Moody's expectations that Kiloutou's strong operating performance will continue such that Moody's adjusted debt/EBITDA will remain below 4x in the next 12-18 months. It also includes Moody's expectation for an improved free cash flow generation from FY2024 onwards after a period of elevated levels of growth capex,” the agency said.

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