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Moody’s cuts Milacron, notes; rates loan B2
Moody's Investors Service said it downgraded Milacron Intermediate Holdings Inc.'s corporate family rating to B3 from B2 and probability of default rating to B3-PD from B2-PD following the company's announcement of a debt-funded dividend to its equity sponsor, CCMP Capital Advisors.
The agency also assigned a B2 to Milacron's new senior secured term loan B that will fund the proposed dividend as well as refinance the company's existing senior secured term loan B and senior secured notes.
In addition, Moody's downgraded the senior unsecured notes to Caa2 from Caa1, which are held at Milacron LLC and Mcron Finance Corp., co-issuers.
The existing term loan B rating of B1 and senior secured notes rating of B1 are unaffected but will be withdrawn upon closing of the transaction.
The outlook is stable.
Moody’s said the downgrade reflects the meaningful increase in debt-to-EBITDA leverage as a result of the proposed transaction, and Moody's expectation that leverage will remain above 6 times over the next 12-18 months notwithstanding projected earnings growth.
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