Moody’s rates Zep facilities B2, Caa2

Moody's Investors Service said it affirmed Zep Inc.'s B3 corporate family rating, B3-PD probability of default rating and B2 senior secured revolver and term loan ratings.

At the same time, the agency assigned a B2 rating to the company's proposed $45 million first-lien revolver and $550 million first-lien term loan. It also assigned a Caa2 rating to Zep's proposed $175 million second-lien term loan.

The outlook is stable.

Proceeds from the new debt facilities will be used to fund the acquisition of AFCO C&S, LLC, repay existing debt and make a shareholder distribution. Ratings on the existing $42.5 million revolving credit facility and $356 million term loan will be withdrawn at closing when the facilities are repaid.

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