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Moody's rates Contech facilities Ba3
Moody's Investors Service said it assigned a Ba3 rating to Contech Construction Products Inc.'s proposed $350 million senior secured credit facilities.
More specifically, Moody's assigned a Ba3 rating to Contech's proposed $125 million senior secured revolver due 2009 and $225 million senior secured term loan B due 2010, a Ba3 senior implied rating, and a B1 senior unsecured issuer rating.
The outlook is stable.
According to Moody's, the ratings reflect the company's strong position in the manufacture and distribution of specialty construction products sold to the civil engineering infrastructure sector of the heavy construction industry and the expectation that demand for the company's products should be less cyclical than that of the construction industry as a whole. The company's ratings also reflect the company's high goodwill and increased leverage.
Proceeds from the credit facilities will be applied toward a $175 million dividend to the company's shareholders and to repay $52 million of debt, fund permitted acquisitions, and for other corporate purposes. The revolver's availability at close is expected to be in the area of $120 million. The revolver will include a $20 million sub-limit for issuance of letters of credit.
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