Moody’s rates Bioplan loans B2, Caa2

Moody's Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to Bioplan USA Inc., B2 (LGD3) ratings to its proposed $65 million first-lien senior secured revolving credit facility and $375 million first-lien senior secured term loan and a Caa2 (LGD5) rating to its $145 million second-lien senior secured term loan. The outlook is stable.

Bioplan USA will be 100% owned by Tripolis Holdings Sarl, a Luxembourg private limited liability company that was created to merge the sampling and packaging operations of Arcade Marketing and Bioplan.

Proceeds from the new credit facilities (includes $10 million expected to be drawn under the revolver at closing) will be used to finance the carve-out of Arcade Marketing from Visant Corp. and the carve-out of Bioplan from Ileos Group. The debt financing will repay about $315 million of existing Arcade and Bioplan debt payable to Visant and Ileos and pay a $193 million distribution to the private equity sponsors.

The agency said Bioplan USA's B3 corporate family rating takes into consideration the combined company's small size, elevated pro forma financial leverage (total debt to EBITDA of roughly 7 times), somewhat high customer concentration, ownership by private equity sponsors and the lengthy integration period that could pose risks associated with the process of merging two manufacturers with different, albeit complementary, operating cultures.

In Moody’s view, these concerns are mitigated by Bioplan USA's position as the world's largest provider of sampling and packaging services for the fragrance, beauty and personal care industries with a global manufacturing footprint.

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