Moody's assigns XSYS B3, loans B2, Caa2

Moody's Investors Service said it assigned a B3 corporate family rating and B3-PD probability of default rating to LSF11 Folio Bidco GmbH (XSYS). Moody's also assigned a B2 instrument rating to XSYS' €435 million senior secured first-lien term loan B and its €80 million senior secured first-lien revolving credit facility and a Caa2 rating to the €80 million senior secured second-lien term loan.

“The B3 rating assigned to XSYS' balances the company's high leverage (approximately seven times debt to EBITDA including pension liabilities), narrow business profile in terms of concentration on flexographic printing and customers and small scale compared to other rated companies, against its exposure to the relatively resilient packaging end market, a concentrated market structure supporting high profitability, expectation of positive free cash flow and good liquidity,” Moody’s said in a press release.

The proceeds and an equity contribution will be used to finance the acquisition of XSYS from ColourOZ MidCo and related fees as well as funding cash on XSYS' balance sheet.

The outlook is positive. The outlook reflects an expectation that the company's leverage will decrease to below 6.5x by 2023 and that it will generate solid free cash flow and maintains a good liquidity profile, Moody’s said.

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