Moody’s rates APCO facilities B3

Moody's Investors Service said it assigned B3 ratings to APCO Holdings, LLC's new senior secured credit facilities, including a $220 million term loan and $20 million revolver.

The company is extending the maturities of its credit facilities, and will use proceeds from the new term loan to repay its existing term loan, fund an acquisition and pay related fees and expenses.

The outlook is stable.

Moody’s said that following the refinancing and proposed acquisition, APCO's pro-forma financial leverage will remain high, but the company has the capacity to reduce it over time with its healthy free cash flow.

After losing a significant customer in 2017, APCO rebuilt its revenue organically and through acquisitions.

The proposed acquisition will help grow the top line and also modestly broaden geographic diversification.

The agency said it expects the company's interest coverage to remain in the 1 times to 1.5 times range.

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