2013
09/26

Category:
Credit Ratings

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MOODY’S CORPORATION: Moody’s Assign Ba1 Ratings To Darling’s Credit Score…

Ny, August twenty six, 2013 — Moody#39; h Investors Services, (Moody#39; s) today assigned a Ba1 rating to Darling Global Inc. #39; s (Darling) proposed $750 million older secured spinning credit center and its proposed $350 , 000, 000 delayed draw senior anchored Term Mortgage A. Other ratings are usually affirmed. Proceeds of the issuance are expected to be used to finance the company#39; s recommended acquisition of each of the assets associated with Rothsay, a division of Walnut Leaf Food items Inc. for CAD $645 million in cash. Rothsay is a top recycler of animal by-products in Canada.

In case, as part of this particular transaction, Darling#39; s $250 million senior unsecured records receive security and become identico passu using the bank amenities, Moody#39; t expects typically the notes to be upgraded from Ba2 in order to Ba1.

The next ratings are usually assigned, controlled by Moody#39; t review of ultimate documentation:

Beloved International Incorporation.

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$750 mil senior anchored revolving credit facility because of 2018 in Ba1 (LGD 4, 51%)

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$350 mil senior secured delayed draw term mortgage A because of 2018 in Ba1 (LGD 4, 51%)

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Ratings affirmed

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Corporate Family Rating of Ba1

Likelihood of Standard Rating regarding Ba1-PD

$415 million mature secured revolver due 2015 at Baa3 (LGD2, 25%)

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$250 , 000, 000 senior unguaranteed notes because of 2018 in Ba2 (LGD5, 77%)

Assuming Grade Fluid Rating of SGL — 1

Typically the outlook is stable.

Moody#39; s desires to take away the rating on the $415 million senior secured revolver upon shutting of the fresh $750 million senior guaranteed revolver.

SCORES RATIONALE

Typically the Ba1 Corporate Family Ranking reflects Darling#39; s attractive profitability, sturdy cash runs, its great scale inside rendering plus recycling for that food industry — which Moody#39; h expects will be better following the acquisition of Rothsay — and its essential role inside the waste handling process. Moody#39; s desires revenues to boost in the large single chiffre owing to the particular company#39; t acquisitions which will expand their operations outside the United States as well as its entry into surrounding categories for example industrial recurring processing. Credit rating metrics will weaken as a result of the elevated debt, but nevertheless be adequate for the rating category. Moody#39; t expects investments in the Diamond Green Diesel powered joint venture with Valero to start with to generate pregressive earnings for the company because the processing center came online at the end of Summer of 2013. Darling provides good liquidity that is supported by strong money flows. The company#39; h increasing scale and geographic diversity are just partially counter by the delivery risk associated with digesting current acquisitions.

The Ba1 ranking also features risks linked to the volatility within related goods, changes in raw material amounts, as well as the tariff of finished items. However , versatile pricing mechanisms offset some of the company#39; t commodity exposure (approximately 75% of Darling#39; s natural material quantities processed are usually subject to formulation based deals which locking mechanism indexes finished product costs to the raw material cost which provides a few protection against price declines), though this may decrease as the organization expands internationally since such contractual arrangements are less normal outside the US Darling#39; s business may also be adversely influenced by several aspects outside their control, which includes animal condition, weather, legislation and business disputes.

The particular stable outlook reflects Moody#39; s view regarding the strength of Darling#39; s income and earnings which Moody#39; s desires it to be able to deploy to minimize leverage received to pursue acquisitions. Typically the stable perspective also displays Darling#39; h improving geographic diversity plus scale.

The particular rating might be upgraded when Darling can continue to enhance its scale and geographic diversification without materially weakening its credit score metrics or operational performance. An upgrade could be considered if the organization is able to achieve debt/EBITDA beneath 2 . five times for a sustained period. Further, successful the use of its transactions would be required before Moody#39; s may consider a great upgrade.

Darling#39; s ratings could be decreased if the company#39; s success, cash flow stability or fluidity deteriorates. Moody#39; s could also downgrade the particular ratings in case dividends or perhaps acquisitions result in weakened credit score metrics with debt-to-EBITDA exceeds 3. 0 times over a sustained basis.

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The principal strategy used in this particular rating was the Global Proteins and Agriculture Industry Methodology published in May 2013. Other methodologies used include Damage Given Default for Speculative-Grade Non-Financial Firms in the US, Europe and EMEA published inside June this year. Please see the Credit Policy page about www.moodys.com to get a copy of such methodologies.

Darling provides making, recycling plus recovery strategies to the United states food industry. Finished items, which are purcahased by producers regarding livestock, feed, oleo-chemicals, bio-fuels, soaps plus pet food items, include various meats and bone fragments meal (MBM), bleachable elegant tallow (BFT), cookie food, and yellow grease (YG). Revenues for the twelve months ended June thirty, 2013 were $1. 7 billion.

REGULATING DISCLOSURES

Regarding ratings given on a plan, series or category/class regarding debt, this particular announcement offers certain regulating disclosures in relation to each ranking of a consequently issued relationship or notice of the same collection or category/class of debt or pursuant to a plan for which the particular ratings usually are derived solely from existing ratings in accordance with Moody#39; s rating procedures. For ratings issued on the support provider, this announcement provides particular regulatory disclosures in relation to the particular rating actions on the help provider and relation to each particular ranking action with regard to securities that will derive their credit ratings from your support provider#39; s credit score. For interino ratings, this announcement gives certain corporate disclosures regarding the eventual rating given, and in connection with a defined rating that could be assigned after the final issuance of the financial debt, in each case where the transaction structure and phrases have not changed prior to the project of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tabs on the issuer/entity page for your respective issuer on www.moodys.com.

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For any influenced securities or even rated organizations receiving primary credit assistance from the main entity(ies) of this rating activity, and whoever ratings may possibly change as a result of this score action, typically the associated regulatory disclosures will probably be those of the particular guarantor enterprise. Exceptions to this approach are present for the subsequent disclosures, if applicable in order to jurisdiction: Ancillary Services, Disclosure to ranked entity, Disclosure from ranked entity.

Corporate disclosures contained in this press release apply to typically the credit rating plus, if applicable, the associated rating view or score review.

Make sure you see www.moodys.com for any updates on becomes the lead score analyst also to the Moody#39; s legitimate entity which has issued typically the rating.

Please see the rankings tab around the issuer/entity web page on www.moodys.com for additional regulatory disclosures for every credit rating.

Nancy#160; E. #160; Meadows
Vice President — Senior Analyzer
Company Finance Team
Moody#39; s Traders Service, Incorporation.
two hundred fifity Greenwich Streets
New York, NY 10007
USA.
MEDIA: 212-553-0376
SUBSCRIBERS: 212-553-1653

Peter H. Abdill, CFA
MD : Corporate Financial
Company Finance Group
MEDIA: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody#39; t Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
USA.
JOURNALISTS: 212-553-0376
MEMBERS: 212-553-1653

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