Moody's assigns Magpul, notes B1

Moody's Investors Service said it assigned first-time new issuer ratings to Magpul Industries Corp., including a B1 corporate family rating and a B1-PD probability of default rating. Concurrently, Moody's gave a B1 rating to the company's planned $300 million of senior secured second-lien notes due 2028.

“The company has a solid EBITDA margin and has good channel diversification including a sizable exposure to ecommerce. Demand for the company's products has been very high since 2020, driven by consumer views that federal government firearms policy could shift and tailwinds related to the coronavirus pandemic and social unrest in some U.S. cities. Magpul has good credit metrics including low debt/EBITDA leverage of 1.8x as of the last 12 months ending March 31, 2021, and pro forma for the notes offering,” Moody’s said in a press release.

The proceeds are expected to be used to refinance debt and to fund a dividend to shareholders including private equity sponsor Albion River. Concurrent with the transaction the company is expected to enter a new, unrated $25 million senior secured first-lien revolving credit facility due 2024, which is expected to be undrawn at close.

The outlook is stable.

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