Moody’s assigns Flender, loans B1

Moody’s Investors Service said it assigned a B1 corporate family rating and B1-PD probability of default rating to Zephyr German Holdco GmbH (Flender). Concurrently, Moody’s gave B1 ratings to the proposed €1.045 billion seven-year senior secured term loan B and €150 million 6.5-year senior secured revolving credit facility to be issued to Zephyr German BidCo GmbH. The outlook is stable.

Flender’s B1 rating is supported by its market position within the market for wind gearboxes, the mission-critical nature of gearboxes in wind turbines, its industrial division, diversified manufacturing footprint for its size, with facilities in the U.S., Europe and Asia, and sizeable equity contribution by Carlyle, funding the acquisition with almost 50% equity and the commitment to preserve leverage metrics in line with the requirements for the B1 rating category, Moody’s said.

Private equity firm Carlyle will use the term loan proceeds to help fund the acquisition from Siemens AG and pay fees and expenses. The transaction is supported by about 50% of common equity.

The outlook rests on Flender’s ability to show a stable EBITA margin despite some overall price pressure in the wind turbine industry and the anticipated slowdown in global onshore installations, Moody’s said.

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