Moody’s rates Parex facilities B2

Moody's Investors Service said it assigned provisional B2 instrument ratings to the proposed €865 million senior secured term loan B maturing 2024 and senior secured €100 million revolving credit facility maturing 2023 to be raised by Dry Mix Solutions Investissements SAS and other intermediate holding companies of Parex Group.

The term loan proceeds together with €48 million of available cash on balance sheet will be used to refinance the group's existing €550 million due 2021 and €150 million due 2023 senior secured floating-rate notes issued by Dry Mix, to fully redeem a shareholder loan (€59 million) and to pay a €141 million dividend and expected transaction costs.

Concurrently, the agency assigned a B2 corporate family rating and B2-PD probability of default rating to Financière Dry Mix Solutions SAS, the top holding entity of Parex's new financing group and.

The outlook on all ratings is stable.

Moody's withdrew the B1 corporate family rating and Ba3-PD probability of default rating of Dry Mix Solutions.

Upon completion of the proposed refinancing, the agency expects to withdraw the B1 instrument ratings on the existing senior secured floating-rate notes issued by Dry Mix.

The B2 corporate family rating reflects the substantial increase in Parex's debt following the proposed refinancing, which includes a debt-funded dividend payment and full redemption of its outstanding shareholder loan (considered as equity by Moody's), the agency said.

Pro forma for the transaction, the group's leverage as adjusted by Moody's increases to around 5.5 times gross debt/EBITDA, compared with an actual 4.5 times ratio, as of Dec. 31, 2016.

This exceeds the agency's leverage guidance for a B1 rating of sustainably below 5 times and is, hence, reflected in the assigned B2 corporate family rating, i.e. one notch below the withdrawn B1 corporate family rating, Moody’s said.

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