Moody's rates Colfax notes Ba2

Moody's Investors Service said it affirmed Colfax Corp.'s corporate family rating at Ba2, probability of default rating at Ba2-PD and the senior unsecured credit facility – a $750 million term loan and $1.3 billion revolving line of credit – at Ba2 (LGD 4).

The agency also said it assigned a Ba2 to Colfax's proposed €350 million senior unsecured notes issue.

The speculative grade liquidity rating also was maintained at SGL-2.

The outlook is stable.

The proceeds from the senior unsecured notes will be used to repay borrowings under Colfax's revolving credit facility and other bilateral credit agreements, Moody's said, as well as for general corporate purposes.

The agency said it expects the transaction to be debt neutral, essentially terming out short-term funds with longer-dated notes.

Colfax's operating results have progressively weakened over the past two years due largely to the sharp downturn in the energy sector, yet metrics remain commensurate with Ba2-caliber levels, Moody's said.

The agency said it anticipates increasing stabilization of Colfax's end markets as the year progresses with growth commencing in late 2017 to early 2018.

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