Moody's assigns RelaDyne, loan B2

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to AIP RD Buyer Corp. (RelaDyne Inc.), a wholly owned subsidiary of RelaDyne Holding LP. The agency also assigned B2 to the company's new $540 million seven-year first-lien term loan.

"RelaDyne has the leading lubricant distribution platform in the U.S., as well as a leading position as a distributor of fuel and the largest provider of reliability services domestically," according to Joseph Princiotta, a Moody's senior vice president and senior analyst covering RelaDyne, in a press release. "However, initial balance sheet leverage is high with the risk that leverage remains elevated or spikes as a result of M&A objectives," Princiotta added.

The loan, a $165 million second-lien term loan and $420 million in new equity capital are expected to be used to finance the acquisition of RelaDyne Holding LP by private equity firm American Industrial Partners for roughly $1.1 billion, plus fees and expenses. The transaction closed on Dec.23.

The outlook is stable.

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