Moody's rates Altra Industrial notes B3

Moody's Investors Service said it assigned ratings to Altra Industrial Motion Inc. The outlook is stable.

Moody's rates Altra's $165 million senior secured notes due 2011 B3 and senior implied rating B2, senior unsecured issuer rating Caa1 and speculative grade liquidity rating SGL-

3.

Proceeds from the new notes, together with equity investments from Genstar Capital, a private equity firm, will be used to fund the acquisition of the power transmission business from Colfax for $180 million, as well as to repay the existing debt of Kilian, a small specialty bearing company that Genstar recently acquired from Timken and that will be combined with Colfax Power Transmission to form Altra.

Moody's said the ratings are constrained by Altra's significant debt leverage, modest profitability and cash flow generation, as well as its substantial pension funding shortage.

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