Moody's rates Kevlar, loan, notes B3

Moody's Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to Kevlar SpA (Kedrion), the parent company of Kedrion SpA. Moody's also assigned a B3 rating to the planned $790 million of backed senior secured notes due 2029 and to the $75 million senior secured term loan A. The outlook is positive.

On Sept. 1, funds advised by Permira and Kedrion's shareholders jointly acquired and combined Kedrion and Bio Products Laboratory. The total consideration was around $2.5 billion, funded via $1.5 billion of equity, an $865 million bridge loan and a $165 vendor loan, outside of the restricted group. Kevlar will use the proceeds to repay the outstanding bridge loan.

"The B3 rating reflects Kedrion's relatively high initial leverage and initially weak cash flow generation, which offset the benefits of its good business profile because of its positioning in the attractive plasma derivatives market, where barriers to entry are high," said Lorenzo Re, a Moody's vice president, senior analyst and lead analyst for Kedrion, in a press release.

"The integration with BPL offers opportunities for cost synergies and expansion into untapped market segments, which will drive an improvement in operating performance and credit metrics over the next 18-24 months," Re added.

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