Moody’s ups Cott notes, rates bonds B3

Moody's Investors Service said it assigned a B3 rating to Cott Corp.’s new €450million senior unsecured bonds and upgraded its second-lien notes due 2021 to Ba2.

Cott's other ratings, including its B2 corporate family rating, B2-PD probability of default rating, SGL-2 liquidity rating and the B3 rating on its existing $525 million senior unsecured debt, were affirmed.

The debt issuance will be used for general corporate purposes, primarily to finance the company’s pending acquisition of Eden Springs (Hydra Dutch Holdings 2 BV, B2, negative), a deal valued at about €470 million ($530 million).

Moody's expects the transaction to close in the third quarter of fiscal 2016.

The outlook is stable.

"Cott's B2 Corporate Family Rating reflects its growing geographic and business diversification following the acquisition of Eden Springs, continuing its transformation away from its legacy private label beverage business which has been in decline," Moody's senior vice president Linda Montag said in a news release.

"While leverage will rise post-acquisition of Eden it will remain acceptable for the current rating with debt/EBITDA (including Moody's standard adjustments) at around 4.8 times at closing."

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