(The following statement was released by the rating agency)
Oct 3 - Standard & Poor's Ratings Services today said its issue-level rating on Loveland, Ohio-based integrated packaging solutions company Pro Mach Inc.'s credit facility ($50 million revolver due 2016 and $245 million term loan due 2017) is unchanged. The company is proposing to add $40 million to its existing $255 million credit facility, for an aggregate of $295 million. The issue-level rating on the credit facility is 'B+' and the recovery rating is '3', indicating our expectations for a substantial (50% to 70%) recovery for lenders in the event of a payment default. Pro Mach provides integrated packaging solutions, primarily serving the food, beverage, household goods, and pharmaceutical end-markets. The company will use the proceeds to fund several acquisitions.
The 'B+' corporate credit rating and stable outlook on Pro Mach remain unaffected. We expect credit measures to remain somewhat in line with our expectations for the rating. We believe that over the next 12 months the company will maintain credit protection measures in line with our indicative ratios for an "aggressive" financial risk profile, including the ratio of total debt to EBITDA of about 4.0x to 5.0x and funds from operations to debt of 10% to 15% over the business cycle. Our "weak" business risk profile assessment incorporates our view of its participation in a highly fragmented and competitive packaging industry, and its relatively narrow scope of operations.
RELATED CRITERIA AND RESEARCH
-- Business Risk/Financial Risk Matrix Expanded, Sept. 18, 2012
-- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011
-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
RATINGS LIST Pro Mach Inc. Corporate Credit Rating B+/Stable/-- $50 mil revolver due 2016 B+ Recovery Rating 3 $245 mil term loan due 2017 B+ Recovery Rating 3
(Caryn Trokie, New York Ratings Unit)
((Caryn.Trokie@thomsonreuters.com; 646-223-6318; Reuters Messaging: rm://caryn.trokie.reuters.com@reuters.net))
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