Moody's assigns B3 to Brock loan

Moody's Ratings said it assigned new ratings to Brock Holdings III, LLC, including a B3 corporate family rating, B3-PD probability of default rating and a B3 rating to its planned senior secured first-lien term loan. The outlook is stable.

The B3 CFR reflects Brock’s small scale, heightened leverage, generally improving operating performance, with enough liquidity to fund its operations but a history of inconsistent free cash flow generation. During 2020-2023, rebates and concessions granted to clients during the pandemic, which expired in 2023, hurt profitability, and by material losses generated in a large fixed-price contract caused by a delayed project start rather than Brock's performance, Moody’s explained.

Limiting the rating is that Brock’s top five clients account for more than 45% of its 2023 revenues, the agency noted.

Brock will use the loan to repay indebtedness, pay transaction costs, and for general corporate purposes.

"Brock's proposed transaction will add liquidity, extend its maturity schedule, and add financial flexibility," said Giancarlo Rubio, a Moody's Ratings vice president, in a press release. "Upon closing, the company will have $569 million of balance sheet debt and greater than $100 million of total liquidity, including available borrowing capacity under its new $150 million ABL facility."

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