Moody’s trims Waterlogic

Moody's Investors Service said it downgraded the corporate family rating to B3 from B2 and probability of default rating to B3-PD from B2-PD of Waterlogic Group Holdings Ltd.

Concurrently, Moody's downgraded the ratings of the company's senior secured credit facilities split between a €277 million term loan B1 due 2025 (including the new $120 million equivalent euro term loan B1 add-on), a £87.5 million term loan B2 due 2025, an A$87.6 million term loan B3 due 2025 (split between a B3A tranche of A$6 million and a B3B tranche of A$81.6 million, and a $45 million equivalent revolving credit facility due 2024 to B3 from B2.

The term loan B1, the term loan B2, the term loan B3A and the revolver were borrowed by Waterlogic Finance Ltd. whereas the term loan B3B was borrowed by Waterlogic Australia Holdings Pty.

The outlook is stable.

The proceeds from the $120 million equivalent add-on will be used to refinance partially drawn revolver, pay transaction fees and expenses and cash on balance sheet to provide additional funding for potential future bolt-on and selected strategic acquisitions.

Moody’s said the action was mainly driven by the company's debt-financed acquisition strategy which is likely to keep the company's Moody's-adjusted leverage above 6x, at the level incompatible with B2 rating, during the next 12 to 18 months despite the company's strong organic growth supported by favorable industry dynamics.

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