Moody's rates Great Lakes Dredge notes B3

Moody's Investors Service said it assigned a B3 rating (LGD4, 67%) to Great Lakes Dredge & Dock Corp.'s proposed $250 million senior notes.

The B2 corporate family and probability-of-default ratings were affirmed.

The outlook is stable.

Proceeds will be used to repay the $175 million senior subordinated notes due 2013 and for general corporate purposes, including any future potential acquisitions.

The B2 corporate family rating reflects the historically volatile domestic dredging bid market and dependence on government funding priorities, the agency said.

These factors are counterbalanced against the company's good market position, moderate financial leverage and high barriers to entry afforded by the Jones Act and sizable capital requirements to enter the dredging business, the agency noted.

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