Moody’s gives Armacell loan B3

Moody’s Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to Neptune Holdco Sarl (Armacell) and a B3 instrument rating to the €710 million senior secured term loan B and €110 million senior secured revolving credit facility borrowed by Neptune Bidco Sarl and co-borrowed by Neptune US Bidco Inc., both subsidiaries of Neptune Holdco Sarl. The outlook is stable.

Neptune Holdco, controlled by a consortium consisting of PAI Partners and Kirkbi A/S, will acquire Armacell Holdco Luxembourg Sarl, which is currently controlled by a consortium consisting of private equity funds managed by Blackstone and Kirkbi. Moody’s sees withdrawing the ratings on Armacell Holdco Luxemburg and the instruments ratings on its €622 million term loan and €100 million senior secured revolving credit facility borrowed by Armacell Bidco Luxembourg Sarl upon the closing of the acquisition expected in February 2020.

Armacell’s B3 CFR is constrained by a high pro forma Moody's adjusted gross starting leverage of 7.2x and Moody's expectation leverage will remain elevated at around 7x in 2020 and only gradually fall below 7x in 2021.

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