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Moody’s ups Radio Systems, rates loan B1
Moody's Investors Service said it upgraded Radio Systems Corp.’s corporate family rating to B1 from B2 and probability of default rating to B1-PD from B2-PD.
Concurrently, the agency assigned a B1 rating to the company's newly proposed $300 million seven-year senior secured term loan B.
Proceeds, together with about $24.4 million of borrowings from a new $50 million ABL (unrated) and $1 million of cash from the balance sheet, will be used to refinance existing debt ($250 million of senior secured notes and $49.2 million of ABL borrowings), fund the notes call premium of $10.5 million, prepay the upcoming interest payment of $10.5 million and pay estimated fees and expenses (including OID) associated with the transaction.
The B3 rating on the existing $250 million of senior secured notes will be withdrawn at the close of the transaction.
The outlook remains stable.
Moody’s said the upgrade of Radio Systems' corporate family rating reflects the view that the company will sustain its debt leverage below 4 times despite the continuation of its largely acquisition based growth strategy. The rating is no longer constrained by uncertainty regarding the company's future capital structure.
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