Moody’s: Air Methods facilities B1, notes Caa1

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to ASP AMC Merger Sub, Inc. (to become Air Methods Corp.).

ASP is an acquisition vehicle that will be merged with and into Air Methods upon closing of a leveraged buyout.

Concurrently, the agency assigned a B1 rating to the company's proposed first-lien senior secured bank revolving credit facility and term loan, and a Caa1 rating to the proposed senior unsecured notes.

The outlook is stable.

Proceeds from the $1.070billion term loan, $560 million in unsecured notes and almost $700 million in common equity will fund the leveraged buyout of the company by American Securities, refinance existing debt and pay transaction fees and expenses.

Moody's noted that the term loan can be increased on a dollar-for-dollar basis to refinance any secured aircraft financing for which a change of control consent is not obtained. The agency expects this will have no impact on the ratings.

"The company is weakly positioned in the B2 rating category with adjusted debt to EBITDA of 6.3 times," Moody's analyst Todd Robinson said in a news release.

"However, organic growth coupled with the use of internally generated cash to make acquisitions should generate enough incremental earnings to reduce leverage below 6 times over the next year."

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