Moody’s rates EWT loans B2, Caa1

Moody's Investors Service said it assigned a B2 corporate family rating to EWT Holdings III Corp., the parent company of Evoqua Water Technologies LLC.

At the same time, the agency assigned EWT a B2-PD probability of default rating, a B2 rating to its senior secured $580 million first-lien credit facility – term loan and revolving facility – and a Caa1 rating to its $75 million second-lien term loan.

The outlook is stable.

Proceeds, along with equity from AEA Investors LP, financed the acquisition of EWT by AEA from Siemens AG in January 2014.

Moody’s said the B2 rating reflects EWT's high financial leverage following the leveraged buyout. Adjusted debt-to-EBITDA (including Moody's standard accounting adjustments) stood at about 5.4 times at fiscal year-end Sept. 30, and the agency expects leverage to remain in the 5 times range over the next 12-18 months.

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