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Moody's rates Tube City loan B1
Moody's Investors Service said it lowered its corporate family rating for Mill Services Corp. to B2 from B1 and assigned a B2 corporate family rating to Tube City IMS Corp.
Moody's also assigned B1 ratings to the new secured credit facilities being arranged for two of Tube City IMS's primary subsidiaries, Tube City LLC and International Mill Service Inc. (the co-borrowers).
More specifically, Moody's assigned Tube City LLC and International Mill Service Inc. a B1 rating for the $250 million senior secured credit facilities comprised of a $75 million five-year revolver and a $175 million five-year term loan.
These actions derive from the process of analyzing proposed security offerings of Tube City IMS Ltd. (TCIMS Ltd.), a Canadian company set up to do an initial public offering of Income Participating Securities, which will consist of C$115 million of subordinated notes issued by Tube City IMS ULC, a newly formed Nova Scotia-domiciled unlimited liability company, and C$106 million of common shares issued by TCIMS Ltd. TCIMS Ltd. will own 100% of TCIMS, a US holding company that owns Tube City, LLC and International Mill Service, Inc.
The outlook for Tube City IMS is stable.
Looking at Tube City IMS's business and operating risks, Moody's said the ratings are constrained by its dependence on sales to customers in the highly cyclical steel industry, predominantly in the United States. The ratings are supported by the company's role as an entrenched provider of mill services at over 60 North American and Eastern European steel plants and its favorable track record of retaining customers and expanding services and revenues at a broad cross section of mills.
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