Moody's rates UTEX loan B2

Moody's Investors Service said it assigned a first-time corporate family rating of B3 and probability of default rating of B3-PD to UTEX Industries, Inc.

Moody's also said it assigned a B2 (LGD 3, 34%) to the company's proposed $350 million first-lien facilities, consisting of a $50 million revolving credit facility due 2018 and $300 million first-lien term loan, and a Caa2 (LGD 5, 87%) to its proposed $140 million second-lien term loan.

The outlook is stable.

Riverstone Holdings LLC recently announced a definitive agreement to acquire UTEX from Rhone Capital LLC. UTEX will use proceeds of $440 million from the proposed loans and equity contributed by Riverstone to fund the acquisition and repay existing debt, Moody's said.

UTEX is well-positioned to benefit from positive fundamentals in the market for its specialty sealing solutions that serve the oil and gas industry, the agency said.

The rating balances this strength against its small scale, exposure to cyclical end markets, concentration in the oil and gas industry and niche product offering, Moody's said.

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