Moody's rates Royal Ten loans B2

Moody's Investors Service said it assigned a B2 corporate family rating and B2-PD probability of default rating to Royal Ten Cate.

The agency also said it assigned B2 instrument ratings to the company's senior secured term loan B1, senior secured term loan B2 and the senior secured revolving credit facilities borrowed by Tennessee Acquisition BV, the parent company of Royal Ten.

The outlook is stable.

The ratings consider the amendment of the existing senior secured facilities resulting in an increase of the term loan B1 by up to €130 million, along with an expectation that up to €90 million of the proceeds will be distributed to shareholders, Moody's explained.

The remaining proceeds will be used to repay €34 million drawn under the company's revolver, the agency said.

The ratings reflect a pro forma adjusted gross leverage of about 5.2x and an expectation that leverage will decline toward 4.8x, Moody's said.

The company's business profile is supported by leading positions in several different niche industries, broad and differentiated product portfolio and widespread international presence, the agency said.

These positives are balanced by the limited size of the company and limited visibility, Moody's said.

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