Moody’s gives ASK, loans B3

Moody’s Investors Service said it gave ASK Chemicals International GmbH a B3 corporate family rating and a B3-PD probability of default rating. The agency also rated ASK’s €225 million backed term loan B due 2025 and €40 million backed senior secured revolving credit facility due 2025, B3. Both were issued this month by subsidiary ASK Chemicals Deutschland Holding GmbH. The outlook is stable.

ASK Chemicals Deutschland will use the proceeds to repay a €190 million senior secured term loan due 2023 and a €25 million senior secured revolving credit facility due 2023.

"ASK Chemicals' B3 CFR reflects (1) its leading market position in the niche metal casting chemicals market, (2) the benefits from high barriers to entry due to the company's technology protected by a portfolio of more than 1,000 patents and long-term relationships with customers due to its focus on quality, innovation and R&D, and (3) the company's low maintenance capex of around 2% of sales, creating some capacity to generate free cash flow (FCF) in a downturn," said Chris Scott, Moody's lead analyst for ASK Chemicals, in a press release.

However, ASK’s strengths are tempered by its moderate scale and narrow product portfolio, its exposure to cyclical end-markets, Moody's projected moderate positive free cash flow from 2023 at low single-digit rates as a percentage of total adjusted gross debt reflecting the company's relatively weak profitability, and high Moody's adjusted gross leverage, the agency said.

The outlook reflects the position that the new capital structure will help ASK maintain leverage and interest coverage commensurate with its rating category while delivering positive free cash flow and maintaining adequate liquidity, Moody’s said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.