Research Update: Pixelle Specialty Solutions LLC Assigned 'B-' Rating, Outlook Stable; Credit Facility Rated 'B-'

Spring Grove, Pa.-based specialty paper manufacturer Pixelle Specialty Solutions LLC is being purchased by private equity financial sponsor Lindsay Goldberg. The transaction will be funded by a proposed $260 million senior secured first-lien credit facility, consisting of a $40 million senior secured first-lien revolving credit facility and a $220 million senior secured first-lien term loan, and by $115 million of cash equity. Pro forma for the transaction, debt-to-EBITDA leverage will be approximately 4.1x and funds from operations (FFO) to debt will be about 21%. We are assigning our 'B-' issuer credit rating to Pixelle Specialty Solutions LLC. The outlook is stable. We are also assigning our 'B-' issue-level rating to the company's proposed $260 million senior secured first-lien credit facility.

...+ Spring Grove, Pa.-based specialty paper manufacturer Pixelle Specialty Solutions LLC is being purchased by private equity financial sponsor Lindsay Goldberg. + The transaction will be funded by a proposed $260 million senior secured first-lien credit facility, consisting of a $40 million senior secured first-lien revolving credit facility and a $220 million senior secured first-lien term loan, and by $115 million of cash equity. + Pro forma for the transaction, debt-to-EBITDA leverage will be approximately 4.1x and funds from operations (FFO) to debt will be about 21%. + We are assigning our 'B-' issuer credit rating to Pixelle Specialty Solutions LLC. The outlook is stable. We are also assigning our 'B-' issue-level rating to the company's proposed $260 million senior secured first-lien credit facility. + The stable outlook reflects our view that rising paper prices will support Pixelle's revenue and EBITDA prospects over the next 12 months while maintaining debt leverage in the 4x area....

Research Update