Moody's rates Tegrant B3, loans B2, Caa2

Moody's Investors Service said it assigned Tegrant Corp. B3 corporate family and probability-of-default ratings, a B2 senior secured first-lien credit facility rating and a Caa2 senior secured second-lien credit facility rating.

The agency rated the company's $50 million senior secured first-lien revolver and $215 million senior secured first-lien term loan B due 2013 at B2 (LGD 3, 37%) and $75 million senior secured second-lien term loan due 2015 at Caa2 (LGD 5, 85%).

The outlook is stable.

Proceeds were used to help fund Metalmark Capital's acquisition of Tegrant for $400 million.

The B3 corporate family rating reflects Tegrant's recent operating performance, weak free cash flow to debt, lack of long-term contracts, exposure to cyclical end markets, small size and status as a new stand alone entity, according to Moody's.

The ratings are supported by the company's leading position in its markets, highly engineered and customized product mix and good liquidity, Moody's said.

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