Moody's assigns Terra, loans B2

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to TMC Buyer, Inc. (Terra Millennium Corp.) and B2 ratings to the company's planned senior secured first-lien credit facility including a $50 million revolving credit facility, a $435 million term loan and a $100 million delayed-draw term loan. The outlook is stable.

Funds affiliated with H.I.G. Capital will use the term loan to help fund the acquisition of the company.

"Terra Millennium's B2 CFR reflects its small business scale, large exposure to cyclical industries and elevated debt leverage. The majority of its revenues come from the recurring turnaround, maintenance and repair projects that are based on time and material or unit price contract structures and carry limited risks. The remaining fixed-price projects present the opportunity for higher margins, but entail higher execution risks. Adjusted debt/EBITDA of low five times at the closing looks adequate for the B2 rating, but could be affected by acquisitions," said Jiming Zou, Moody's lead analyst on Terra Millennium, in a press release.

The outlook presumes Terra Millennium’s operating results will remain relatively stable with adequate credit metrics and liquidity in the next 12 to 18 months, the agency said.

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