Moody’s rates Transtar loan B1

Moody's Investors Service said it assigned a B1 rating to the $69.7 million super priority debtor-in-possession delayed-draw term loan and letter-of-credit facility entered into by Transtar Holding Co. to provide the company with the necessary liquidity during the Chapter 11 restructuring process.

The DIP term loan is provided by the pre-petition first-lien lenders that are contributing new money.

Moody’s said the rating primarily reflects the collateral coverage available to the DIP term loan lenders and the structural features of the DIP facility.

“The DIP term loan is secured by substantially all domestic assets of the company with an upstream secured guarantees from all Transtar's material domestic subsidiaries, and includes a super priority claim under the Chapter 11 of the U.S. Bankruptcy Code,” the agency said in a news release.

“The rating also considers the size of the DIP term loan relative to Transtar's pre-petition debt and the nature of the bankruptcy and reorganization.

“The bankruptcy court approved the execution of the DIP term loan in its final debtor-in-possession order on Dec. 22, 2016.”

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