Moody’s rates RBC Bearings Ba3, notes B2

Moody's Investors Service said it assigned ratings to Roller Bearing Co. of America, Inc., which does business as RBC Bearings Inc., including a corporate family rating of Ba3 and a probability of default rating of Ba3-PD.

Concurrently, Moody's assigned a B2 rating to the company's proposed senior notes and speculative grade liquidity rating of SGL-2.

The outlook is stable.

Proceeds from proposed bank facilities, comprised of a $500 million undrawn revolver and $1.3 billion term loan, both unrated by Moody’s, together with $1.1 billion of new equity and cash on hand will be used to fund the $2.9 billion pending acquisition of the mechanical power transmission business of ABB Ltd., known as Dodge.

“RBC Bearings' Ba3 CFR reflects its leading position in the highly engineered precision bearings and components market, serving both the aerospace and defense and industrial end markets,” Moody’s said in a news release.

“Dodge's strong presence in the mechanical bearings and power transmission components markets will significantly enhance the company's competitive position in the bearings market.

“RBC Bearings' solid EBITDA margins and strong cash generation reflect the company's brand strength along with the highly engineered nature of its products.”

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