Moody's gives Watco notes B3

Moody's Investors Service said it assigned a B3 rating to Watco Cos. LLC's proposed $400 million senior unsecured notes due 2023.

At the same time, Moody's assigned a B1 corporate family rating and a B1-PD probability of default rating to the company.

Proceeds of the financing will be used primarily to refinance existing debt.

The outlook is stable.

The $400 million of senior notes are rated B3, which is two notches below the corporate family rating and. The lower rating reflects the impact that the company's sizeable secured revolving credit facility has on the implied recovery of these notes under Moody's Loss Given Default methodology, the agency said.

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