Moody’s rates Regal Rexnord Baa3

Moody’s Investors Service said it gave a first-time issuer rating of Baa3 to Regal Rexnord Corp. The outlook is stable.

Regal Rexnord plans to buy Altra Industrial Motion Corp. for $4.95 billion. To finance the deal, which is expected to close during the first half of 2023, Regal Rexnord plans to raise new debt.

“Regal Rexnord's Baa3 issuer rating benefits from its well-established market position in the electronic motors, air moving subsystems, automation components and powertrain markets. Its pricing power and brand strength are reflected in its strong EBITDA margins that approximate 20% annually,” Moody’s said in a press release.

However, the agency noted an expectation for initially high leverage after the Altra deal closes limits the rating.

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