Moody's rates Eimskip loans B1

Moody's Investors Service said it assigned B3 corporate family and probability-of-default ratings to Eimskip Holdings, Inc., B1 ratings (LGD2, 29%) to the company's C$50 million senior secured revolving credit facility and its C$510 million senior secured first-lien term loan and a Caa1 rating (LGD5, 72%) to its C$140 million second-lien term loan.

The outlook is stable.

Eimskip is a subsidiary established by Hf. Eimskipafelag Islands to acquire Versacold Income Fund for C$12.25 in cash per trust unit. The offer will be financed with proceeds from the loans.

The corporate family rating considers the company's high leverage and limited free cash flow generation, the agency said.

The ratings also consider the company's stable revenue stream, strong market position, as well as limited customer concentrations and the growing trend of public refrigerated warehousing, Moody's said.

The ratings could be downgraded if the company's debt-to-EBITDA ratio rises above 8.5 times. The ratings could be upgraded if the company's debt-to-EBITDA ratio were to fall below 7 times, the agency said.

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