Moody's rates Clayton Holdings loans B1

Moody's Investors Service has assigned a B1 rating to Clayton Holdings Inc.'s $190 million senior secured credit facility, which includes a $150 million term loan and a $40 million revolver, both maturing in 2011. Moody's also affirmed Clayton's B1 corporate family rating.

The outlook is stable.

The ratings reflect Clayton's position as a leading provider of non-conforming mortgage-related outsourced services and analytics that primarily support non-agency mortgage-backed securities issuance, the agency said. Other positives include Clayton's solid margins and revenue growth, as well as strong interest coverage.

Clayton's challenges include high effective leverage - 3.25x adjusted debt to EBITDA - and limited hard assets to support the debt issuance. In addition, Moody's said the company would benefit from further diversification of its revenue streams beyond its due diligence services.

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