Moody's rates Grede loans B1

Moody's Investors Service said it assigned Grede Holdings LLC a B1 corporate family rating and B2-PD probability of default rating.

Concurrently, the agency assigned B1 ratings to the company's proposed $75 million senior secured revolving credit facility and $600 million senior secured term loan B.

The outlook is stable.

Proceeds from the credit facilities, along with about $257 million of equity contribution, will be used to fund the acquisition of Grede by American Securities for $825 million, refinance the company's existing debt and pay related fees and expenses.

"The acquisition by American Securities increases Grede's debt balance to a high level given the cyclicality inherent in its end markets," Adam McLaren, Moody's lead analyst for Grede, said in a news release. "However, the company's market position, particularly in safety-critical parts, as well as our expectation for substantial near term free cash flow and strong interest coverage support the B1 rating."

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