Moody’s applies Ba3 to Yestar notes

Moody's Investors Service said it assigned a provisional Ba3 rating to Yestar International Holdings Co. Ltd.’s (Ba3 stable) proposed senior notes.

The outlook is stable.

Proceeds will be used to refinance and/or repay existing debt, fund future capital expenditure and acquisitions, and the remaining amount will be applied for working capital and general corporate purposes.

"The rating of the proposed notes has not been notched down from Yestar's corporate family rating of Ba3 because we expect the company's level of secured and subsidiary debt will stay low relative to its total assets over the next 12 months," Moody's vice president and senior analyst Gloria Tsuen said in a news release.

The proposed bond, at $200 million to $225 million, will increase Yestar's adjusted debt/EBITDA to 2.7 times to 2.9 times in 2016 from 1.3 times in 2015, as the company prefunds its acquisition-related cash outlays for this year. Moody's said it expects leverage to decline toward 2.5 times to 2.7 times by 2018.

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