Moody's lowers Arctic Glacier, rates loan B1

Moody's Investors Service said it downgraded Arctic Glacier U.S.A., Inc.'s corporate family rating to B3 from B2 and its probability of default rating to B3-PD from B2-PD.

As part of this action, Moody's also said it assigned B1 (LGD 3, 31%) ratings to the company's proposed first-lien senior secured bank facilities, consisting of a $40 million revolving credit facility due 2018 and a $260 million term loan due 2019.

The outlook is stable.

The proceeds will be used from the proposed first-lien bank debt and an unrated $150 million second-lien term loan to refinance the existing term loan and mezzanine debt, the agency said, and to fund a special dividend and acquisitions, Moody's said.

Arctic Glacier's ratings reflect modest pro forma coverage given an expectation that EBITDA less capital expenditure-to-interest will range from 1.3x to 1.4 x over the next 12 to 18 months, the agency said.

The ratings also consider its modest scale, exposure to weather and regional economic conditions and increasing acquisition activity as it seeks to expand its presence in certain regions, the agency added.

The ratings are supported by the company's business position as the second-largest manufacturer and distributor of ice in the United States and No. 1 position in the smaller Canadian market, Moody's said.

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