Moody’s rates USI incremental loan B2

Moody’s Investors Service said it assigned a B2 rating to USI Inc.’s proposed incremental $150 million senior secured term loan.

USI will use the proceeds along with newly issued equity to buy Associated Benefits and Risk Consulting for $266 million from Associated Banc-Corp.

“Giving effect to the pending transaction, Moody’s estimates that USI’s pro forma debt-to-EBITDA ratio will be about 8x, which is aggressive for its rating category. The company’s (EBITDA – capex) interest coverage will be about 2x and its free-cash-flow-to-debt ratio will remain in the low single digits,” Moody’s said in a press release.

Moody’s affirmed USI’s B3 rating, and the outlook remains stable.

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