Score Motion: Moody’s affirms TricorBraun’s B3 CFR; outlook steady
World Credit score Analysis – 10 Dec 2020
New York, December 10, 2020 — Moody’s Buyers Service (“Moody’s”) has affirmed TricorBraun Holdings, Inc’s (“TricorBraun”) B3 Company Household Score (CFR), B3-PD Chance of Default Score, the B2 ranking on the corporate’s first lien time period mortgage, and the Caa2 ranking on the second lien notes. The outlook is steady.
The affirmation of the ranking and steady outlook displays Moody’s expectation of continued sturdy EBITDA margin and a measured method to the corporate’s development by way of acquisition technique with out compromising credit score metrics.
..Issuer: TricorBraun Holdings, Inc.
…. Company Household Score, Affirmed B3
…. Chance of Default Score, Affirmed B3-PD
….Senior Secured 1st Lien Revolving Credit score Facility, Affirmed B2 (LGD3)
….Senior Secured 1st Lien Time period Mortgage, Affirmed B2 (LGD3)
….Senior Secured 2nd Lien Notes, Affirmed Caa2 (LGD5)
..Issuer: TricorBraun Holdings, Inc.
….Outlook, Stays Secure
TricorBraun’s B3 CFR displays the corporate’s value-added providers and enormous scale relative to opponents in its fragmented packaging trade. Moody’s expects the corporate to proceed to generate regular EBITDA margins within the vary of 12-13.5%. TricorBraun’s asset gentle enterprise mannequin requires minimal capital expenditures affording the corporate the power to constantly generate free money that can be utilized to fund acquisitions or be directed towards debt discount.
The B3 CFR is constrained by TricorBraun’s excessive leverage, aggressive monetary coverage and acquisitiveness, publicity to commodity merchandise, and potential disintermediation. Sooner or later TricorBraun’s clients could acquire scale and try and go on to the producer reducing out the providers of the corporate. The corporate can even have to deal with the expiration of its revolver in November 2021. With leverage at its lowest level because the LBO by AEA in 2016, Moody’s believes there’s a threat the corporate will increase gross leverage with a recapitalization that features a dividend distribution.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The scores might be upgraded if debt to EBITDA is beneath 5.5x for a sustained time frame, EBITDA to curiosity expense reaches 3.0x, free money stream to debt exceeds 4.5%, and the corporate implements a extra conservative monetary coverage.
The scores might be downgraded if debt to EBITDA exceeds 6.5x for a sustained time frame, EBITDA to curiosity expense falls beneath 2.0x, free money stream to debt beneath 1%, and the corporate executes vital debt financed acquisitions or dividends.
Primarily based in St. Louis, Missouri, TricorBraun Holdings, Inc. is a distributor of inflexible packaging, with capabilities in package deal design and engineering, logistics, and worldwide sourcing. The product line consists of plastic and glass bottles, sprayers, dispensers, closures, pails, tubes, drums and different objects. Finish markets embrace private care, healthcare, meals, industrial and family chemical substances, and wine. Income for the twelve months ended September 30, 2020 have been roughly $1.4 billion. TricorBraun is a portfolio firm of AEA buyers and doesn’t publicly disclose monetary info.
The principal methodology utilized in these scores was Packaging Producers: Metallic, Glass and Plastic Containers Methodology revealed in September 2020 and obtainable at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1236221. Alternatively, please see the Score Methodologies web page on www.moodys.com for a replica of this technique.
For additional specification of Moody’s key ranking assumptions and sensitivity evaluation, see the sections Methodology Assumptions and Sensitivity to Assumptions within the disclosure type. Moody’s Score Symbols and Definitions will be discovered at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For scores issued on a program, collection, class/class of debt or safety this announcement offers sure regulatory disclosures in relation to every ranking of a subsequently issued bond or observe of the identical collection, class/class of debt, safety or pursuant to a program for which the scores are derived completely from present scores in accordance with Moody’s ranking practices. For scores issued on a assist supplier, this announcement offers sure regulatory disclosures in relation to the credit standing motion on the assist supplier and in relation to every specific credit standing motion for securities that derive their credit score scores from the assist supplier’s credit standing. For provisional scores, this announcement offers sure regulatory disclosures in relation to the provisional ranking assigned, and in relation to a definitive ranking which may be assigned subsequent to the ultimate issuance of the debt, in every case the place the transaction construction and phrases haven’t modified previous to the project of the definitive ranking in a way that might have affected the ranking. For additional info please see the scores tab on the issuer/entity web page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit score assist from the first entity(ies) of this credit standing motion, and whose scores could change because of this credit standing motion, the related regulatory disclosures will likely be these of the guarantor entity. Exceptions to this method exist for the next disclosures, if relevant to jurisdiction: Ancillary Providers, Disclosure to rated entity, Disclosure from rated entity.
The scores have been disclosed to the rated entity or its designated agent(s) and issued with no modification ensuing from that disclosure.
These scores are solicited. Please consult with Moody’s Coverage for Designating and Assigning Unsolicited Credit score Rankings obtainable on its web site www.moodys.com.
Regulatory disclosures contained on this press launch apply to the credit standing and, if relevant, the associated ranking outlook or ranking evaluation.
Moody’s common rules for assessing environmental, social and governance (ESG) dangers in our credit score evaluation will be discovered at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569.
The World Scale Credit score Score on this Credit score Score Announcement was issued by one in all Moody’s associates outdoors the EU and is endorsed by Moody’s Deutschland GmbH, An der Welle 5, Frankfurt am Predominant 60322, Germany, in accordance with Artwork.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit score Score Companies. Additional info on the EU endorsement standing and on the Moody’s workplace that issued the credit standing is out there on www.moodys.com.
Please see www.moodys.com for any updates on modifications to the lead ranking analyst and to the Moody’s authorized entity that has issued the ranking.
Please see the scores tab on the issuer/entity web page on www.moodys.com for extra regulatory disclosures for every credit standing.
Scott Manduca Vice President - Senior Analyst Company Finance Group Moody's Buyers Service, Inc. 250 Greenwich Road New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Shopper Service: 1 212 553 1653 Dean Diaz Affiliate Managing Director Company Finance Group JOURNALISTS: 1 212 553 0376 Shopper Service: 1 212 553 1653 Releasing Workplace: Moody's Buyers Service, Inc. 250 Greenwich Road New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Shopper Service: 1 212 553 1653
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