LABL Inc. Downgraded To 'B-' On Holding Company's PIK Notes Issuance; Outlook Stable

LABL Intermediate Holding Corp., the indirect parent of packaged goods label company LABL Inc. (doing business through its Batavia, Ohio-based subsidiary Multi-Color Corp.), is issuing $500 million of payment-in-kind (PIK) toggle notes to fund a distribution to its shareholders, including financial sponsor Platinum Equity Advisors LLC. Pro forma for the transaction, we estimate that Multi-Color's adjusted debt to EBITDA for the 12 months ended June 30, 2020, will rise to 10.7x from 9.1x. We are lowering our long-term issuer credit rating on LABL Inc. to 'B-' from 'B'. At the same time, we are lowering our issue-level ratings on the company's existing credit facilities and senior secured and unsecured notes by one notch, though our recovery ratings remain unchanged. The

...October 21, 2020 - LABL Intermediate Holding Corp., the indirect parent of packaged goods label company LABL Inc. (doing business through its Batavia, Ohio-based subsidiary Multi-Color Corp.), is issuing $500 million of payment-in-kind (PIK) toggle notes to fund a distribution to its shareholders, including financial sponsor Platinum Equity Advisors LLC. - Pro forma for the transaction, we estimate that Multi-Color's adjusted debt to EBITDA for the 12 months ended June 30, 2020, will rise to 10.7x from 9.1x. - We are lowering our long-term issuer credit rating on LABL Inc. to 'B-' from 'B'. - At the same time, we are lowering our issue-level ratings on the company's existing credit facilities and senior secured and unsecured notes by one notch, though our recovery ratings remain unchanged. - The stable outlook reflects our view that as the negative effects of the COVID-19 pandemic abate, Multi-Color's organic growth of roughly 3%, continued operational improvements, and absence of previously...

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