Moody's rates Specialty Chemicals loan B1

Moody's Investors Service said it assigned a B1 rating to the proposed €475 million senior secured term loan B1 and the €100 million senior secured revolving credit facility issued by Specialty Chemicals Holding I BV. At the same time, Moody's assigned a B1 rating to the $60 million senior secured term loan issued by Polynt Composites USA, Inc.

The outlooks on Specialty Chemicals International BV, Reichhold LLC2 and Specialty Chemicals Holding II BV were changed to positive from stable. The agency also affirmed Specialty Chemicals International’s B1 and B1-PD ratings. Moody's expects to withdraw the rating for the existing €506 million equivalent term loan once the refinancing has taken place.

Moody's changed the outlook to positive to reflect the EBITDA improvements in 2019 and the expectation that performance will at least be stable in 2020. In addition, the rating action takes into consideration the new debt structure that retains the low gross leverage but also lowers the interest expense, which will improve free cash flow going forward.

“The company has had a good track record of deleveraging since the assignment of ratings and since closing of the merger of Polynt and Reichhold in May 2017. SCI BV has so far benefited from material merger-related synergies whose positive EBITDA effects will moderate to around €8 million in 2019,” said Moody’s in a press release.

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