(Finance) – Moody’s downgraded the long-term corporate family rating (CFR) of Guala Closuresan Italian multinational active in the production of plastic and aluminum closures for the beverage industry, at “B2” from “B1” and its probability of default rating (PDR) to “B2-PD” from “B1-PD”.
At the same time, Moody’s downgraded the ratings on the €500 million senior secured notes due 2028 and the €500 million secured variable rate notes (FRNs) due 2029 to “B2” from “B1”. L’outlook has changed from negative to stable.
The proceeds deriving from tap of €150 million out of the current €350 million senior secured FRNs maturing in 2029 will be used to finance the acquisition of Astir and to pay fees and expenses associated with the transaction, leaving €16 million as surplus cash on the balance sheet for general corporate purposes.
“Today’s downgrade reflects the Guala’s operational performance weaker than expected since July 2023 and our expectation that the business environment will remain challenging in 2024, impacting the company’s EBITDA growth trajectory and not allowing for significant deleveraging to a level consistent with the previous B1 rating,” says Donatella Maso, lead analyst at Moody’s for Guala.
“While the Astir acquisition, while small, will be positive for Guala’s business profile and will not materially impact leverage, will weaken cover ratios of the company for interest and cash flow, and will add incremental integration risk,” adds Maso.