Moody’s rates USIC loans B2, Caa2

Moody’s Investors Service said it assigned B2 ratings to USIC Holdings Inc.’s proposed senior secured first-lien credit facilities consisting of a $955 million term loan due 2028 and $200 million revolving credit facility due 2026 and a Caa2 rating to its planned $335 million second lien senior secured term loan due 2029.

“The B2 (LGD3) ratings on the senior secured first-lien revolver and term loan maturing 2026 and 2028, respectively, reflect their priority position in the capital structure, ahead of the second-lien instrument. The Caa2 (LGD5) rating on the senior secured second-lien term loan maturing 2029 reflects its junior position in the capital structure,” the agency said in a press release.

Proceeds along with $75 million of balance sheet cash and $35 million of incremental borrowings on receivable and supplier financing facilities will be used to fully repay USIC’s $744 million first-lien term loan due 2023 and $290 million second-lien term loan due 2024, issue a one-time $350 million distribution to shareholders, and pay related fees & expenses. Upon the close of the transaction, the pre-existing debt will be withdrawn concurrently with the associated repayment of its debt obligation.

Moody’s also affirmed USIC’s B3 corporate family rating and B3-PD probability of default rating.

The outlook remains stable.

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