Moody’s may lower Filtration

Moody's Investors Service said it placed Filtration Group Corp.'s ratings under review for downgrade, including its B2 corporate family rating, B2-PD probability of default rating, B2 (LGD 3) first-lien term loan and revolving facilities and Caa1 (LGD 6) second-lien term loan.

The review follows Filtration Group's agreement to purchase the Porous Technologies business from Essentra plc for £220 million, Moody’s said.

This represents the second meaningfully-sized acquisition announced this month by the company, which said it would purchase Mahle GmbH's Industrial Filtration unit Aug. 7, the agency said.

The review will focus on the sources of financing for these acquisitions, along with Filtration's overall liquidity, Moody’s said, and concerns related to the company's rapid growth through acquisitions.

Moody's said anticipates the transactions to be financed with debt, which will raise leverage to about 7x, which is high relative to expectations at the B2 rating level.

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