Moody's gives Bayer Environmental B3

Moody's Investors Service said it assigned a B3 corporate family rating, a B3-PD probability of default rating to Bayer Environmental Science (Discovery Purchaser Corp.), a B3 rating to the company's planned senior secured first-lien credit facility including a $1.346 billion term loan and a revolving credit facility, and Caa2 rating to the proposed $300 million second-lien term loan.

The term loans and equity capital will be used to fund the acquisition of BES by Cinven SA.

"BES's B3 CFR mainly reflects the high debt leverage under its private equity ownership, execution risks associated with its transition to be independent from Bayer and competition with other large and better capitalized companies. These risks are partially mitigated by the company's leading market positions, high profitability and low capital intensity thanks to its focus on product formulation and registration, as well as the recurring demand from turf, vector and vegetation management," said Jiming Zou, a Moody's lead analyst on BES, in a press release.

The outlook is stable.

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