Recipient email addresses will not be used in mailing lists or redistributed.
Use semicolon to separate each address, limit to 20 addresses.
characters you see
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
Don't want to see this again?
Accept our to continue to Moodys.com:
AND SCROLL DOWN!
By clicking “I AGREE” [at the end of this document],
you indicate that you understand and intend these terms and conditions to be
the legal equivalent of a signed, written contract and equally binding, and
that you accept such terms and conditions as a condition of viewing any and all
Moody’s information that becomes accessible to you [after clicking “I AGREE”] (the
“Information”). References herein to “Moody’s” include Moody’s
Corporation, Inc. and each of its subsidiaries and affiliates.
Terms of One-Time Website Use
you have entered into an express written contract with Moody’s to the contrary,
you agree that you have no right to use the Information in a commercial or
public setting and no right to copy it, save it, print it, sell it, or publish
or distribute any portion of it in any form.
acknowledge and agree that Moody’s credit ratings: (i) are current opinions of
the future relative creditworthiness of securities and address no other risk; and
(ii) are not statements of current
or historical fact or recommendations to purchase, hold or sell particular
securities. Moody’s credit ratings and
publications are not intended for retail investors, and it would be reckless
and inappropriate for retail investors to use Moody’s credit ratings and
publications when making an investment decision. No
warranty, express or implied, as the accuracy, timeliness, completeness,
merchantability or fitness for any particular purpose of any Moody’s credit
rating is given or made by Moody’s in any form whatsoever.
3. To the extent permitted by law, Moody’s and its directors,
officers, employees, representatives, licensors and suppliers disclaim
liability for: (i) any indirect, special, consequential, or incidental losses
or damages whatsoever arising from or in connection with use of the
Information; and (ii) any direct or compensatory damages caused to any person
or entity, including but not limited to by any negligence (but excluding fraud
or any other type of liability that by law cannot be excluded) on the part of
Moody’s or any of its directors, officers, employees, agents, representatives,
licensors or suppliers, arising from or in connection with use of the
4. You agree to read [and
be bound by] the more detailed disclosures regarding Moody’s ratings and the
limitations of Moody’s liability included in the Information.
5. You agree that any disputes relating to this agreement or your use of
the Information, whether sounding in contract, tort, statute or otherwise,
shall be governed by the laws of the State of New York and shall be subject to
the exclusive jurisdiction of the courts of the State of New York located in
the City and County of New York, Borough of Manhattan.
03 Jun 2004
MOODY'S ASSIGNS B2 TO VISKASE COMPANIES, INC.'S PROPOSED $90MM SECURED NOTE AND ASSIGNS AN SGL-2 SPECULATIVE GRADE LIQUIDITY RATING
Approximately $90 million of debt securities affected
New York, June 03, 2004 -- Moody's Investors Service assigned ratings to Viskase Companies,
Inc. ("Viskase"), which include a B2 rating to the proposed
$90 million senior secured note, due 2011. This is
the first time since Viskase emerged from bankruptcy in April 2003 that
Moody's is rating the debt of this leading producer of non-edible
cellulosic, fibrous, and plastic casings which are used to
prepare and package processed meat products.
Today, Moody's assigned the following ratings:
B2 to the proposed $90 million senior secured notes, due
SGL-2 Speculative Grade Liquidity Rating
B2 senior implied rating
Caa1 senior unsecured issuer rating (non-guaranteed exposure)
The ratings outlook is stable.
Ratings are subject to the review of final documentation.
Proceeds from the transaction, along with an estimated $11
million of cash on the balance sheet, will be used to repay existing
8% senior subordinated notes, which were issued as part of
the bankruptcy reorganization (not rated by Moody's); to effect the
early termination of existing capital leases; and to pay related
fees and expenses. Concurrently, Viskase will also enter
into a new $20 million committed first lien borrowing base working
capital facility (not rated by Moody's). At the closing of
the proposed transactions, no advances under the proposed bank facility
are anticipated. However, there are likely to be letters
of credit outstanding totaling approximately $2 million.
Moody's ratings reflect the reduced financial flexibility of Viskase's
capital structure post the proposed transactions.
The ratings reflect Viskase's weak financial profile, notably modest
free cash flow after satisfying North American cash pension payments and
obligations for other post-retirement employee benefits (the obligations
for both of these are significant at approximately $54 million
and $47 million, respectively); deficit retained earnings;
and high financial leverage. The ratings are constrained by its
sizable non-US operations (accounting for approximately 45%
of consolidated revenue and 20% of EBITDA), from which there
are no pledges or guarantees of the debt at Viskase. Moreover,
the ratings are further limited by litigation risk arising out of environmental
contamination found at a facility owned by Viskase's Canadian subsidiary;
the absence of contracted business for the majority of Viskase's relatively
small revenue base of approximately $200 million; and intense
competition. Additionally, Viskase's pricing and related
earnings have not benefited historically from consolidation amongst its
It is likely that true stabilization of the ratings outlook will take
several quarters. However, the stable ratings outlook expresses
Moody's tolerance for modest weakening of the company's financial profile.
The ratings outlook could change to negative if there is material negative
variance from expectations - including any acquisitions; increases
in the cash payments for pension or other post-retirement employee
benefits; adverse settlement of litigation; or increased capital
More positively, the ratings incorporate Viskase's long operating
history, global presence, and established clientele.
The relatively concentrated landscape of the food casings industry worldwide
supports visibility into revenue. The ratings also acknowledge
the company's proven ability to remain competitive pre and post bankruptcy.
The assignment of the SGL-2 rating reflects Moody's expectation
that pro-forma liquidity should be good throughout the near term.
The liquidity rating reflects that net cash generated by operations should
remain sufficient to fully satisfy cash payments for pension and other
post-retirement employee benefits as well as to fund working capital
and planned capital expenditures. Liquidity benefits from virtually
full availability under the proposed $20 million committed revolver
for which usage is expected to be minimal. Although financial covenants
were not finalized at the time of this review, it is expected that
cushion will likely be modest on a quarterly basis. Financial covenants
are anticipated to address minimum EBITDA and maximum capital expenditures.
Full encumbrance of domestic assets and the likely limited ability to
dispose of foreign assets without material erosion in enterprise value
limit the liquidity rating.
Pro-forma for the proposed transaction, financial leverage
is high, notably when debt is adjusted to include the underfunded
pension and post-retirement employment benefits liabilities.
Adjusted debt to EBIT is approximately 19 times (9 times EBITDA).
EBITDA less capital expenditures coverage of pro-forma interest
expense is modest at roughly 2 times.
The absence of notching above the B2 senior implied rating for the proposed
$90 million senior secured note reflects the marginal collateral
coverage as well as the contractual subordination of the notes to potential
exposure under the proposed first lien $20 million revolver (advances
are subject to a borrowing base formula). The rating also incorporates
the risk that Viskase's substantial pension liabilities would have significant
leverage over the proposed notes under a bankruptcy scenario or on an
impaired going concern basis (e.g. payments would continue).
The B2 rating for the proposed senior secured issuance reflects weak collateral
coverage in a distress scenario. The notes are to be secured by
a first lien on domestic property, plant, and equipment,
a second lien on domestic inventory and receivables (behind the up to
$20 million working capital facility), and a first lien on
all other domestic assets pari passu with the working capital facility.
Collateral also includes a pledge of the stock from Viskase's domestic
restricted subsidiaries and 65% of the stock of its foreign subsidiaries.
Guarantees, on a senior secured basis, by each existing and
future domestic subsidiaries are intended to support the notes.
Headquartered in Willowbrook, Illinois, Viskase Companies,
Inc. is a worldwide producer of non-edible cellulosic,
fibrous, and plastic casings used to prepare and package processed
meats. The company has a diverse branded customer base with longstanding
relationships. Viskase operates in a sub sector of the flexible
packaging industry devoted to packaging for the meat, poultry,
and seafood markets with a stable compounded annual growth of 1%
for the period of 1998 to 2003. Pro-forma for the last twelve
months ended March 31, 2004, revenue was approximately $200
million and adjusted EBITDA was approximately $22 million.
Principal owners of Viskase's common equity include Carl C. Icahan
and associates (approximately 27%), Merrill Lynch & Co.,
Inc. (approximately 13%), Northeast Investors Trust
(approximately 12%) and others.
Andris G. Kalnins
Senior Vice President
Corporate Finance Group
Moody's Investors Service
Kendra M. Smith
VP - Senior Credit Officer
Corporate Finance Group
Moody's Investors Service
No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.
CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.
CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.
All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.
To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.
Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com
under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”
Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.
Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.
MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.