Moody's lowers Financiere Top Mendel

Moody's Investors Service said it downgraded the corporate family rating of Financiere Top Mendel SAS (Ceva) to B3 from B1 and its probability of default rating to B3-PD from B1-PD.

The agency also said it assigned a B3 rating to the proposed new €2.150 million senior secured facilities, comprising a €2.0 billion senior secured term loan B and €50 million senior secured acquisition and capital expenditure facility due in 2026 and €100 million senior secured revolving credit facility due in 2025, borrowed by the groups' subsidiaries Financiere Mendel SAS and Ceva Sante Animal.

The outlook also was revised to stable from negative.

Moody's said it expects to withdraw the instrument ratings on the existing facilities upon completion of the transaction.

The downgrades reflect the notable increase in the company's leverage following the proposed refinancing, which entails a significant cash upstream outside the restricted group and denotes a more aggressive financial policy than previously factored into the credit assessment, Moody's said.

The stable outlook reflects an expectation that Ceva's adjusted debt-to-EBITDA ratio will remain at or higher than 7x in the next 24 months, notwithstanding the company's expected solid operating performance and favorable industry dynamics, the agency said.

The ratings are constrained by the highly leveraged capital structure of the company following the proposed refinancing, Moody's said.

Ceva has an established track record of profitable growth, which is credit positive, the agency said.

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