S&P assigns Axalta notes BB-

S&P said it assigned a BB- rating to the planned offering of $500 million of senior unsecured notes due 2027 by Axalta Coating Systems Dutch B BV and Axalta Coating Systems LLC. The recovery rating on the notes is 5 indicating S&P’s forecast for modest (10%-30%; rounded estimate: 20%) recovery.

Proceeds will be used for general corporate purposes. “We expect this cash to be held on the balance sheet to boost the company’s liquidity profile,” S&P said in a press release.

The agency also lowered the rating on Axalta’s unsecured debt to BB- from BB. The recovery rating is 5 given the added proposed unsecured debt in the capital structure, S&P said.

“We are also assigning a BB issuer credit rating to Axalta Coating Systems Ltd., the entity that issues financials for the Axalta group. This entity is also expected to be the guarantor of the proposed notes,” S&P said.

The agency affirmed the BBB- rating on the revolver and first-lien term loans. The 1 recovery ratings indicating S&P’s estimate for very high (90%-100%; rounded estimate: 95%) recovery are unchanged, the agency said.

The outlook is stable.

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