Moody's rates FR Flow loans B3, Ba3

Moody's Investors Service said it assigned first-time ratings to FR Flow Control Luxco 1 Sarl, including a corporate family rating of B3, probability of default rating of B3-PD, senior secured ratings of B3 on the proposed revolving credit facility and term loan B and Ba3 rating on the proposed senior secured term loan C.

The outlook is stable.

FR Flow Control is the financing subsidiary of parent company, FR Flow Control Midco Ltd. (U.K.).

The ratings follow the company's plan to raise $290 million of new senior secured debt – a $40 million first-lien revolving credit facility, $180 million first-lien term loan B and $70 million first-lien term loan C – supported by new sponsor equity to fund the leveraged buyout of Flow Control from the Weir Group plc by private equity sponsor First Reserve Corp., Moody's said.

The ratings reflect Flow Control's modest scale, considerably lower margins relative to industry peers, uneven free cash flow generation and lack of a track record operating as a stand-alone entity, the agency said.

Meaningful exposure to end markets that are highly cyclical highlighted also constrains the credit profile, Moody's said.

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