Moody’s rates IPL Plastics B2, notes B3

Moody's Investors Service said it assigned ratings to Intelligent Packaging Ltd. Finco Inc., consisting of a B2 corporate family rating, B2-PD probability of default rating and a B3 rating for its $450 million senior secured notes.

The outlook is stable.

Madison Dearborn Partners entered into an agreement to acquire IPL Plastics Inc. as part of a take-private transaction. The transaction will be structured with Intelligent Packaging Sub LP as the parent holding company of IPL Plastics and IPL Finco.

The proceeds from the senior secured notes, along with Madison Dearborn Partners' equity injection, will be used to partially fund the acquisition and refinance all existing debt at IPL Plastics.

The agency said the rating on Intelligent Packaging is constrained by its relatively small scale, pro-forma leverage, and the fragmented and competitive nature of the plastics packaging industry, among other things.

However, the company benefits from a diversified business model through three main business segments with geographical diversification and high exposure to relatively stable end markets including food packaging, environmental solutions and agricultural consumers, Moody’s said.

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