Moody’s drops Avantor; rates loans B1, Caa1

Moody's Investors Service said it downgraded Avantor Performance Materials Holdings SA’s corporate family rating to B2 from B1 and probability of default rating to B2-PD from B1-PD.

At the same time, the agency assigned B1 ratings to the new first-lien senior secured term loan and Caa1 to the new second-lien senior secured term loan issued by subsidiary Avantor Performance Materials Holdings, Inc.

Proceeds will be used to refinance the existing senior secured term loan facility, the B1 rating on which will be withdrawn when the new term loan closes, and to finance a $759 million dividend to the equity owner New Mountain Capital.

The outlook is positive.

"The dividend recapitalization is being done at a time when the company's balance sheet is under-levered following a period of debt reduction and significant growth in EBITDA, which is largely a result of improved execution by new senior management," Joseph Princiotta, Moody’s vice president, senior credit officer and lead analyst for Avantor, said in a news release.

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