Moody’s gives Baa2 to CCL notes

Moody's Investors Service said it assigned a Baa2 rating to CCL Industries Inc.'s $300 million unsecured notes, which have the potential to be upsized.

The outlook is stable.

Net proceeds from the notes will be used to repay a portion of drawings under the company's revolving credit facility.

Moody’s said the Baa2 unsecured rating is primarily driven by CCL’s good operational track record, both organically and by way of successful acquisitions, solid position in the global label industry, strong credit metrics, and good free cash flow generation.

These attributes are balanced by risks with its acquisition strategy and organic top line growth pressures in certain business segments.

CCL has no publicly stated leverage target and while the company is very acquisitive, the rating presumes that leverage (adjusted debt/EBITDA) will continue to be sustained below 3 times (pro forma is 2.6 times).

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