Moody’s hikes Refresco

Moody’s Ratings said it raised its ratings for Refresco Holding BV (Pegasus Midco BV), including its corporate family rating and the backed senior secured debt ratings on the backed €3.3 billion equivalent senior secured first-lien term loan B and on the backed €500 million senior secured first-lien revolving credit facility to B1 from B2. Refresco’s debt is issued through Pegasus BidCo BV.

The agency also revised the outlook for both companies to stable from positive.

"Refresco's rating upgrade reflects the company's strong business profile in virtue of its size, strong market position and predictability of maintaining stable profit, as demonstrated recently, for example, with the ability to weather the difficult market conditions over the last two years in light of sustained high raw material costs," said Paolo Leschiutta, a Moody's Ratings senior vice president and lead analyst for Refresco, in a press release.

"Despite the strong business profile, Refresco's key credit metrics are currently weak and Moody's Ratings anticipates some further strengthening over the next 12 to 18 months, positioning the company more strongly in the B1 rating category; in this context, the company's operating margins and interest cover are likely to remain low, albeit compensated by Moody's Ratings expectations of further deleveraging, sustained positive free cash flow generation and that management will maintain a conservative financial policy with reference to future acquisitions", Leschiutta added.

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