Moody's rates Airgas notes Baa3

Moody's Investors Service said it assigned a Baa3 rating to $250 million of guaranteed unsecured three year notes to be issued by Airgas Inc.

Proceeds will be used to repay debt outstanding under its unsecured credit facility.

Ratings are currently under review, direction uncertain, due to Air Products' (A3, Prime-2) unsolicited all cash offer in February 2010 to acquire Airgas in a transaction valued at roughly $7 billion, the agency noted.

"Airgas is proceeding with its plan to refinance balances outstanding under its revolver that expires in July 2011, despite the potential hostile takeover. This offering reinforces management's belief that it has sufficient resources to fend off the takeover offer and that it will remain an independent company," John Rogers, a senior vice president at Moody's, said in a statement.

Airgas' Baa3 ratings reflect its leading market share in packaged gases in North America, significant customer density due to bolt-on acquisitions, the stability of credit metrics over the business cycle, substantial operational and customer diversity, and roughly $500 million of yearly cylinder rental income, the agency said.

Ratings are tempered by the expectation for additional bolt-on acquisitions and upcoming debt maturities, the agency noted.

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