Moody's assigns B2 to Canister facility

Moody's Investors Service said it assigned Canister International Group Inc.’s term loan and revolver B2 ratings. The agency also assigned a first-time rating of B2 to the company and a B2-PD probability of default rating.

In October 2019, an affiliate of Cerberus Capital Management, LP, which owns Canister, entered into an agreement to buy the North American and Japanese closures businesses of Reynolds Group Holdings Ltd. The proceeds of the $445 million term loan along with the sponsor's equity contribution will be used to finance the acquisition by the Cerberus affiliate.

The B2 corporate family rating mirrors the company's small scale relative to rated competitors, low organic volume growth due to concentration in carbonated beverages, high customer concentration and risks related to a transition to a stand-alone company. Canister generates most of its revenue and earnings in the mature North American market, which has faced a decline in carbonated soft drink consumption during the past decade and the agency expects this decline to continue. The company has limited exposure to international markets, where carbonated soft beverages are still growing, also constraining its organic growth potential, Moody’s said.

The outlook is stable.

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