Moody's rates Dixie loans B2, Caa2

Moody's Investors Service said it assigned a B3 corporate family rating to Dixie Chemical Co., Inc., which will become a subsidiary of GPH Operating Co. LLC.

The agency also assigned B2 and Caa2 ratings, respectively, to the company's proposed first- and second-lien senior secured credit facilities.

Proceeds from a proposed $130 million first-lien senior secured term loan, proposed $45 million second-lien senior secured term loan, and a modest draw on a proposed $25 million first-lien senior secured revolving credit facility will refinance existing debt, take out various co-investors and fund a sponsor dividend to consolidated the sponsor's ownership position at the fund level.

The outlook is stable.

"Bringing together three distinct businesses under one financing structure provides some diversity but this is largely outweighed by the small size of the individual businesses; additionally the leveraging aspect of the transaction and modest anticipated free cash flow drive the B3 rating assignment," Ben Nelson, a Moody's assistant vice president and lead analyst for Dixie, said in a news release.

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