Moody's rates Hi-Crush CFR, loan B2

Moody's Investors Service said it assigned a B2 corporate family rating, a B2-PD probability of default rating and an SGL-3 speculative grade liquidity rating to Hi-Crush Partners LP, and a B2 rating to the company's proposed $200 million senior secured term loan due 2021.

The outlook is stable.

On April 8, Hi-Crush announced that it entered into a contribution agreement to acquire substantially all the remaining 80% equity interest in Hi-Crush Augusta LLC from Hi-Crush Proppants LLC, its Sponsor. The proceeds from the proposed $200 million senior secured term loan and proceeds from a common equity offering will be used to fund the acquisition of Augusta. Hi-Crush also expects to refinance its existing revolving credit facility (unrated) in connection with this transaction.

Moody's said Hi-Crush's B2 corporate family rating reflects its limited size, lack of free cash flow, reliance on a single commodity product, exposure to one cyclical end market, reliance on the hydraulic fracturing industry for substantively all of its revenue and operating income and its MLP capital structure.

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