Moody’s lifts Axalta, debt; rates bond B2

Moody's Investors Service said it upgraded Axalta Coating Systems Ltd.’s corporate family rating to Ba3 from B1 and probability of default rating to Ba3-PD from B1-PD.

In addition, the agency upgraded the senior secured first-lien revolver and term loans of Axalta's wholly owned subsidiaries – Axalta Coating Systems Dutch Holding B BV, co-borrower Axalta Coating Systems U.S. Holdings Inc. – to Ba2 from Ba3 and the senior unsecured notes of these entities to B2 from B3.

At the same time, Moody's assigned B2 ratings to the new senior unsecured bond issuance at Axalta Coating Systems, LLC, which is expected to have dollar and euro tranches.

Proceeds from the new notes will be used to call the $750 million in existing notes due 2021, to finance the call premium, pay related issuance fees and to enhance liquidity by roughly $67 million.

The outlook is stable.

"The upgrade reflects the improved profitability, lower debt and stronger metrics since Moody's changed the outlook to positive in April 2015," Moody’s vice president, senior credit officer Joseph Princiotta said in a news release.

"The new debt issuance is expected to be virtually leverage neutral while allowing for lower interest expense and an extended maturity profile."

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