Moody’s rates Ceva, facilities B1

Moody's Investors Service said it assigned a B1 corporate family rating and B1-PD probability of default rating to global veterinary health company Financiere Top Mendel SAS (Ceva). The outlook on the ratings is negative.

"The B1 rating of Ceva acknowledges the company's established track record of profitable growth, favorable industry-dynamics and strong liquidity profile," Knut Slatten, Moody's analyst and lead analyst for Ceva, said in a news release.

"The negative outlooks reflects essentially the company's highly leveraged capital structure where leverage is expected to remain stretched for the rating category over the next 24 months."

Concurrently, Moody's assigned a B1 rating with a loss given default assessment of LGD4 to the issuer's existing €668 million term loan facility and proposed €600 million add-on tranche issued at Financiere Mendel SAS and Ceva Sante Animale SAS, wholly owned by Financiere Top Mendel, and due in 2021.

The agency also assigned B1 ratings to the company's €50 million revolving credit facility and the €100 million capex/acquisition facility (both due 2020).

The outlook is negative.

Proceeds from the incremental term loan issuance will be used to: (a) Acquire a portfolio of assets from a competitor; (b) acquire two local players in Brazil; (c) partially repay its outstanding payment in kind (PIK) loans issued at a holding company level outside of the restricted group; and (d) pay fees and expenses incurred in connection with the proposed transactions.

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