Research Update: LABL Inc. Upgraded To 'B' On Cancellation Of Proposed PIK Notes Issuance, Outlook Negative

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.), has cancelled its proposed issuance of $500 million of payment-in-kind (PIK) toggle notes. The company had intended to use the proceeds from these notes to fund a distribution to its shareholders, including financial sponsor Platinum Equity Advisors LLC. We are raising our long-term issuer credit rating on LABL Inc. to 'B' from 'B-' and our issue-level ratings on its existing credit facilities and senior secured and unsecured notes by one notch. Our recovery ratings on the company's debt remain unchanged. The negative outlook reflects the one-in-three potential that ownership and management will attempt to initiate another re-leveraging

...- 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.), has cancelled its proposed issuance of $500 million of payment-in-kind (PIK) toggle notes. - The company had intended to use the proceeds from these notes to fund a distribution to its shareholders, including financial sponsor Platinum Equity Advisors LLC. - We are raising our long-term issuer credit rating on LABL Inc. to 'B' from 'B-' and our issue-level ratings on its existing credit facilities and senior secured and unsecured notes by one notch. Our recovery ratings on the company's debt remain unchanged. - The negative outlook reflects the one-in-three potential that ownership and management will attempt to initiate another re-leveraging transaction during the next year such that Multi-Color's adjusted debt to EBITDA continually exceeds 7x. This risk is partially offset by our expectation for organic growth of...

Research Update