Moody's rates AmerCable's loans B1

Moody's Investors Service said it assigned AmerCable Inc. a B1 rating (LGD3, 39%) to its proposed $15 million senior secured revolver and $100 million senior secured first-lien term loan. Moody's affirmed the B2 corporate family rating and upgraded the probability-of-default rating to B2 from B3.

The outlook is stable.

Proceeds from the loans will be used to buy back shares and repay senior bank debt.

On June 8, AmerCable announced a deal to be acquired by Quintana Energy Partners LP and its affiliated investment funds for $212 million, which could benefit AmerCable given that Quintana owns more than 20 billion tons of coal reserves, the agency said.

The affirmation of the B2 corporate family rating reflects moderate leverage and interest coverage and modest free cash flow, Moody's said.

The ratings reflect the company's leading market share in its core North American markets for cable products, the favorable industry fundamentals, the quality and diversification of its customer base, the company's seasoned, cohesive management team as well as the company's superior margins relative to major competitors in the wire and cable business, the agency said.

The ratings also reflect the company's small size relative to competitors, Moody's said.

The outlook reflects Moody's belief that AmerCable will continue to grow revenue at a double-digit pace, the agency said.

The rating could be downgraded if the issuer's total debt-to-EBITDA ratio rises above 7 times on a sustained basis, Moody's said.

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