Moody’s rates Chromaflo loans B2, Caa2

Moody's Investors Service said it assigned a B3 corporate family rating and B3-PD probability of default rating to ASP Chromaflo Holdings II LP.

The agency also said it assigned B2 (LGD 3) ratings on ASP Chromaflo Intermediate Holdings, Inc.’s $50 million senior secured revolving credit facility and $150 million senior secured first-lien term loan, along with a Caa2 (LGD 5) rating on its $135 million senior secured second-lien term loan.

The agency also said it assigned a B2 (LGD 3) rating on ASP Chromaflo Dutch I BV’s $195 million senior secured first-lien term loan.

The outlook is stable.

The proceeds of the debt issuance, together with an equity contribution, will be used to fund the acquisition of Chromaflo by American Securities LLC from Arsenal Capital Partners, Moody’s said.

Upon completion of the transaction and repayment of previously issued debt, Moody's said it will withdraw ratings on Chromaflo Acquisition Co. LP and Chromaflo Technologies Corp.

The ratings reflect the company's high financial leverage and limited scale and product diversity in a competitive colorants industry, the agency said.

Chromaflo's debt exceeds it revenues by nearly 1.5x and its leverage is high at 6.3x for the year that ended June 30, pro forma for the acquisition of the company by America Securities, Moody’s said.

The ratings are based on the assumption that Chromaflo will grow earnings and free cash flow and will bring the leverage to less than 6x in 2017, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.