Moody's assigns Embecta, loans Ba3

Moody's Investors Service said it assigned first-time ratings to Embecta Corp., including a Ba3 corporate family rating, a Ba3-PD probability of default rating and Ba3 ratings to the planned first-lien senior secured credit facilities. The agency also assigned an SGL-1 speculative grade liquidity rating.

The company is being spun off from Becton, Dickinson and Co. “Embecta's Ba3 corporate family rating broadly reflects its top market position in diabetes insulin injection devices globally. The company benefits from long-standing customer loyalty to its products, driving recurring revenue from users and providers,” Moody’s said in a press release.

However, the rating is constrained by modest growth prospects, as adoption of new insulin management technologies will continue to take share from Embecta's legacy injection products, the agency noted.

Embecta intends to raise new credit facilities consisting of a $500 million senior secured first-lien revolver (undrawn at close), and a $1.15 billion senior secured first-lien term loan., Embecta also reported plans to issue $500 million of other funded debt that Moody's said it expects to be ranked senior secured.

The proceeds will be used to make a $1.44 billion cash distribution to Becton Dickinson, fund $160 million of cash on the balance sheet and pay related fees and expenses.

The outlook is stable.

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