Moody's assigns Generac loans Ba1

Moody's Investors Service said it assigned Ba1 ratings to Generac Power Systems, Inc.'s new senior secured first-lien revolving credit facility and term loan.

All other ratings for Generac are unchanged, including the company's Ba1 corporate family rating, Ba1-PD probability of default rating and Ba1 senior secured term loan B rating. The company's speculative grade liquidity rating is also unchanged at SGL-1.

The new $750 million senior secured first-lien term loan A due 2027 will be used to repay $285 million of asset-based lending facility borrowings, $250 million of term loan B borrowings, with pro forma principal of $530 million outstanding, and add about $200 million to the company's available cash after fees and expenses, pro forma cash of about $400 million at March 31. Generac will terminate its $500 million ABL and put in place a new $1.25 billion revolving credit facility expiring in 2027. The new revolving credit facility will be undrawn at the transaction’s close.

"The transaction improves Generac's already strong liquidity by adding over $200 million of cash and providing access to an incremental $725 million of external liquidity," said Brian Silver, a Moody's vice president and senior analyst, in a press release.

The outlook is stable.

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