Moody’s gives Caliber Collision loans B1, Caa1

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to CH Hold Corp. (doing business as Caliber Collision).

The agency also assigned B1 ratings to the company's proposed $750 million senior secured first-lien term loan, $50 million first-lien delayed-draw term loan and $115 million revolving credit facility, as well as a Caa1 rating to the proposed $250 million second-lien term loan.

The outlook is stable.

Proceeds will be used to refinance the company's existing debt, pay an estimated $105 million dividend to shareholders and pay related fees and expenses.

Moody's estimates lease adjusted leverage pro-forma for the transaction (excluding the delayed-draw term loan) in the mid-6 times range (after giving partial credit for the full year impact from new centers and some onetime items), which is high for the B2 rating.

However, the agency said it anticipates continued solid operating performance including meaningful topline growth, driven by both new center expansion and positive same store sales, as well as modestly improving EBITDA margins, which should result in moderate leverage reduction over the next 12 to 24 months.

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