Moody's rates Louis No. 1 loan B1

Moody's Investors Service said it assigned a B1 corporate family rating to Louis No. 1 plc - the acquirer of the business of TNT Logistics - and a B1 rating to its senior secured credit facilities, which forms part of the acquisition financing and operational funding package for the business.

The outlook is stable.

The agency said the B1 rating reflects the strong competitive position of TNT Logistics' business given its worldwide operational presence and capability to offer an entire supply chain service; revenue stability given its good quality customer base, high retention rates and the long-term nature of its contracts; and opportunities to improve operating margins and strengthen cash flows to service the elevated adjusted debt levels following the acquisition.

The rating also takes also into account customer segment concentrations, notably in the automotive sector; the current heavy revenue reliance on the European Union, relative to modest exposure to Asia and the United States, the risks associated with execution of the company's strategy and cash flow generation to support high financial leverage following the Apollo acquisition; and the need to strictly manage its cost base and to ensure precise contract pricing given the high proportion of closed book type contracts in the portfolio, according to Moody's.

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