Moody's rates Caldic loan B1

Moody's Investors Service said it gave a B1 rating to Pearls (Netherlands) BidCo BV's (Caldic BV) planned €175 million equivalent senior secured first-lien term loan and upgraded its senior secured bank credit facilities to B1 from B2. The agency also raised the issuer’s corporate family rating to B2 from B3 and the probability of default rating to B2-PD from B3-PD.

The company intends to use the loan to fund the cash purchase price portion related to the merger with Connell, refinance the drawings under its revolving credit facility, and pay transaction-related fees.

“The upgrade of Caldic Group's rating reflects the significant improvement in the company's credit metrics and business profile pro forma of the merger with Connell. With the merger, the company shifts to a more conservative financial strategy because the current shareholder of Connell, Wilbur-Ellis, will roll over their equity into the combined group leading to a reduction in financial leverage,” Moody’s said in a press release.

The agency said it estimates the combined company’s leverage for the last 12 months ended Sept. 30, on a pro forma basis for the new debt and full-year contribution of acquisitions declined to below 6x, excluding future synergies, from around 7x on a stand-alone basis.

The outlook is stable.

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