Moody's assigns McJunkin B1, loans Ba1, B2

Moody's Investors Service said it assigned a B1 corporate family rating to McJunkin Corp., a Ba1 rating to McJunkin's proposed $200 million senior secured asset-based revolving credit facility and a B2 rating to the proposed $575 million senior secured term loan facility.

With $241 million in equity from Goldman Sachs Capital Partners, the net proceeds from the notes will be used to fund the buyout of the company, repay substantially all of the existing indebtedness of McJunkin and pay transaction fees and expenses, the agency said.

This is the first time Moody's has assigned ratings to McJunkin and the ratings remain subject to Moody's review of final documentation.

The B1 corporate family rating reflects McJunkin's high leverage, modest operating margins typical of metal distributors, exposure to the volatile energy sector, weak tangible asset coverage and the potential for acquisitions, the agency said.

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