Moody's gives Cobham loans B1

Moody’s Investors Service said it gave B1 ratings to Cobham Ultra SeniorCo Sarl’s planned £1.025 billion sterling equivalent seven-year senior secured first-lien term loan B and the £190 million six and a half year senior secured revolving credit facility.

The issuer is a unit of Cobham Ultra SunCo Sarl, an intermediate holding company within the Cobham Group formed for the purpose of buying Ultra Electronics Holdings plc. Moody’s assigned Cobham Ultra SunCo a B2 corporate family rating and B2-PD probability of default rating.

In explaining the B2 ratings, Moody’s cited Ultra’s robust market position in complex defense and commercial applications, with a strong growth outlook for its product portfolio, its Moody's-adjusted leverage of 7.5x at June 2021, pro forma for the transaction, reducing to below 6.5x in the next 12-18 months and solid forecast for free cash flow generation.

Term loan proceeds, £330 million of dollar-equivalent senior unsecured notes to be issued by the company, about £1.25 billion of payment-in-kind note and an equity contribution, will be used to finance the acquisition of Ultra Electronics, to pay associated fees and expenses and for cash overfunding.

The outlook is stable.

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