Moody’s assigns U.S. Farathane term loan B2

Moody’s Investors Service said it assigned a B2 rating to U.S. Farathane, LLC’s proposed first-lien senior $308 million secured term loan due 2024 and upgraded specific ratings, including the company’s corporate family rating to B3 from Caa3 and probability of default rating to B3-PD from Caa3-PD. The agency changed the outlook to stable from negative.

“The proposed first-lien B2 rating, one notch above the company’s B3 CFR, reflects the repayment priority above the proposed second lien term loan and support provided by unsecured liabilities in the company’s debt structure,” the agency said in a press release.

U.S. Farathane plans to handle debt maturities through refinancing is the basis for the upgrade, the agency said.

It plans to use proceeds and a new unrated $175 million second-lien term loan to repay the senior secured term loan due in December. Upon close, Moody’s said it will withdraw the Caa3 rating on U.S. Farathane’s senior secured term loan facility.

“The stable outlook reflects Moody’s expectation for U.S. Farathane to restore its margin profile to at least 10% EBITA margin and generate sufficient cash flow to support capital investments and required debt service,” the agency said in a press release.

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