Moody’s cuts Sivantos, rates loans B2

Moody’s Investors Service said it downgraded the ratings of Auris Luxembourg II SA, the holding company for Sivantos and its subsidiaries, including the corporate family rating to B2 from B1 and probability of default rating to B2-PD from B1-PD.

The agency also assigned B2 ratings to Auris Luxembourg III Sarl's €2.69 billion equivalent seven-year senior secured term loan B, split between a €1.7 billion term loan B1 and a €990 million term loan B2, and its €200 million 6.5-year senior secured revolving credit facility.

The outlook was changed to negative from stable.

The proposed facilities will be raised to refinance the existing debt facilities and finance the merger with Widex. Upon close of the transaction, the existing instrument ratings, including the B1 rating of Auris Luxembourg III’s senior secured loan facilities and the B3 rating of the €275 million senior unsecured notes issued by Sivantos, will be withdrawn.

The agency said the action was driven by an increase in Moody's-adjusted gross leverage to 9.1 times pro forma for the new capital structure from 5.8 times leading to the downgrade, partially offset by an improvement in the combined entity's business profile and expected cost synergies.

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