S&P rates Exopack notes B-

Standard & Poor's said it assigned its B- corporate credit rating to Exopack Holding Corp. and a B- rating to the company's proposed $235 million senior unsecured notes due 2014.

The outlook is stable.

The ratings reflect a vulnerable business position in a fragmented and highly competitive market, a highly leveraged financial profile and information, integration and execution risks associated with the consolidation of three, recently acquired packaging businesses into Exopack, the agency said.

These risk factors are only partly offset by Exopack's business strengths: the potential for cost savings and margin improvement as synergies between the businesses are realized over time, size-related competitive strengths relative to a large number of smaller companies in its fragmented markets and a presence in both plastic and paper packaging segments, which results in a more diversified business portfolio and somewhat diminishes concentration risks.

S&P said Exopack's financial profile is highly leveraged following the acquisition of its predecessor companies by affiliates of Sun Capital Partners Inc. Pro forma for the transaction, total debt to EBITDA is about 4.5x for the 12 months ended Sept. 30, while funds flow from operations to total debt is about 10%.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.