Moody's rate Synchronous loans B2

Moody's Investors Service said it assigned a B2 rating (LGD3, 33%) to Synchronous Aerospace Group's proposed $95 million senior secured credit facility consisting of a $75 million term loan due 2014 and a $20 million revolver due 2013. Moody's assigned the issuer a B2 corporate family rating and B3 probability-of-default rating.

The outlook is stable.

Proceeds will help fund the acquisition of the company by LJ Synch Holdings, Inc., an affiliate of private equity group Littlejohn & Co., LLC.

The ratings reflect the company's relatively high debt levels resulting from leveraged buyout financing, its small and concentrated sales base and integration risk, Moody's said.

The ratings also consider Moody's concerns over the company's thin projected free cash flow levels and risk to the stability of these cash flows in the event of unexpected market developments, the agency said.

The outlook reflects Moody's expectations that Synchronous will maintain operating margins at least at current levels through fiscal 2008, resulting in modestly positive free cash flow over the near term, Moody's said.

The company could be downgraded if the debt-to-EBTDA ratio rises above 7.5 times, the agency said.

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