Moody’s rates Compass loan Ba1

Moody’s Investors Service said it assigned a Ba1 (LGD 3)rating to the new $100 million term loan E issued by Compass Minerals International, Inc. due May 18, 2017.

The proceeds will be used to fund the acquisition of a 35% stake in the Brazilian plant nutrient manufacturer Produquimica Industria e Comercio SA, Moody’s said.

All of the other ratings on Compass, including its Ba1 corporate family rating, are unchanged.

The outlook is stable.

This largely debt-funded investment is relatively small for Compass Minerals, whose adjusted EBITDA is about $360 million for the last 12 months ending September 2015, Moody’s said.

But, the strategic transaction will further expand the company’s plant nutrition business, improving diversity and modestly grow EBITDA, the agency said.

The ratings reflect the company’s small scale measured by net sales, net assets and limited product portfolio diversity, which is significantly exposed to weather-driven demand volatility for rock salt, Moody’s said.

The ratings also consider the mature nature of the highway de-icing business, the agency said, as well as the company’s need to pursue capital projects or acquisitions in order to provide any desired increase in revenue and earnings growth over time.

© 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.