Moody's assigns SRS term loan B2

Moody's Investors Service said it assigned a B2 rating to SRS Distribution Inc.'s planned senior secured term loan, ranking pari passu to the company's senior secured debt.

“Moody's expects the terms and conditions of the proposed senior secured term to be similar to SRS' existing senior secured term loan maturing 2028. SRS' B3 corporate family rating (CFR) and B3-PD probability of default rating are not affected by the additional debt. The B2 ratings on the company's senior secured debt and the Caa2 ratings on SRS' unsecured notes are not affected as well,” the agency said in a press release. In November, the company sold $850 million of notes due 2029.

The proceeds will be used for acquisitions, including helping to finance its $1.3 billion acquisition of AquaCentral.

"SRS made a splash by acquiring AquaCentral, but at a cost: more debt, higher leverage and increased execution risk," according to Peter Doyle, a Moody’s vice president, in a press release.

The outlook is stable.

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