Moody's assigns Encino notes B3

Moody's Investors Service said it assigned a B3 rating to Encino Acquisition Partners Holdings, LLC's proposed $700 million of senior unsecured notes issuance. Encino's B2 corporate family rating, B2-PD probability of default rating and stable rating outlook are unchanged.

The notes are rated B3, one notch below the B2 CFR, reflecting the priority ranking of the company's $900 million borrowing base secured revolving credit facility, with $485 million outstanding as of Dec. 31, 2020, due in October 2023.

"Encino's issuance of senior unsecured notes is a neutral credit transaction as the proceeds of the notes issuance are being applied towards the full repayment of the company's second-lien term loan and partial repayment of revolving credit facility borrowings," commented Sreedhar Kona, a Moody's vice president, in a press release. "The transaction will boost liquidity and extend the maturity of the company's debt."

Additionally, Moody's said it will withdraw the B3 second-lien loan rating upon the notes’ closing and full repayment of the second-lien term loan.

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