Moody's affirms Airgas ratings

Moody's Investors Service said it affirmed the ratings of Airgas Inc. (senior implied at Ba1) subsequent to the company's announcement that it has signed a non-binding letter of intent to acquire the U.S. packaged gas operations of BOC Group plc in a transaction valued at up to $200 million.

Airgas' outlook is stable.

Moody's said Airgas' Ba1 ratings reflect the relatively stable earnings and cash flow generated by its packaged gas operations, a substantial annuity in the form of cylinder rental fees that will exceed $200 million after this acquisition, its high margins on industrial and specialty gases, and the growing portion of the company's revenue from gases and rents.

The Ba1 ratings are tempered by management's record of aggressive debt-financed acquisitions, and reflect the elevated debt levels subsequent to the transaction.

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