Moody’s assigns Intelligent Packaging B3

Moody’s Investors Service said it assigned Intelligent Packaging HoldCo Issuer LP a B3 corporate family rating, a B3-PD probability of default rating and a Caa2 rating to its proposed $125 million senior unsecured payment-in-kind toggle notes. Moody’s also affirmed the B3 rating on Intelligent Packaging Ltd. Finco Inc.’s senior secured notes.

“The corporate family rating is being moved to IP Holdco from IPL Finco as IP Holdco will become the most senior company with rated debt,” said Louis Ko, a Moody’s analyst, in a press release.

“The corporate family rating is being downgraded one notch because leverage is being increased close to two turns to 7.4X through several financial transactions since the initial rating was assigned on Aug.21, 2020,” he added.

Proceeds will be used to fund a dividend payment to the equity owners of IP HoldCo.

Once the transaction closes, the B2 CFR and B2-PD probability of default rating currently assigned to IPL Finco will be withdrawn. The outlook for IPL Finco will remain stable, Moody’s said.

IP HoldCo’s outlook is stable. “IP HoldCo’s stable outlook reflects Moody’s view that it will maintain its leverage above 7x as the ability to slowly delever from free cash flow is offset by expected future acquisitions and relevering shareholder distributions,” the agency said.

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