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Moody’s rates Progroup notes B1, toggle notes Caa1
Moody’s Investors Service said it assigned a B2 corporate family rating and B2-PD probability of default rating to JH-Holding GmbH, the ultimate holding company for Progroup AG.
Moody’s also said it assigned a provisional B1 (LGD 3) rating to the group’s €400 million senior secured notes, which will be issued by Progroup, a majority owned subsidiary of JH-Holding, as well as a provisional Caa1 (LGD 6) to the €125 million subordinated payment-in-kind toggle notes issued by JH-Holding Finance SA.
The outlook is stable.
The proceeds from the issuance will be used to refinance the group’s current financing arrangements, Moody’s said.
The ratings balance Progroup’s differentiated business model with a cost-efficient asset base in strategic locations and exposure to growing end markets, factors that provide for high profitability with a fairly small scale in a fragmented market, exposure to historically volatile input costs and a leveraged capital structure, the agency said.
The ratings are supported by the group’s business model, which focuses on small batch sizes delivered to small- and medium-size converting customers in a highly automated production process, which allows it to successfully compete in a fragmented market, Moody’s said.
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