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Moody's rates American Rock Salt
Moody's Investors Service said it assigned a B3 rating to American Rock Salt Co. LLC's proposed $100 million guaranteed senior secured notes due 2014, a B3 senior implied rating, a Caa1 senior unsecured issuer rating, and a SGL-3 speculative grade liquidity rating.
Moody's said the ratings primarily reflect the company's high leverage, its relatively short operating history, and the risks associated with operating only one mine, selling one commodity product (highway de-icing rock salt), and serving a narrow geographic region.
The outlook is stable.
Moody's said American Rock Salt will use proceeds from the proposed senior secured notes and a new credit facility (unrated) to refinance construction loans and to fund a cash distribution to its owners. Of the distribution amount, $32 million will first be used to obtain a letter of credit to secure obligations related to pending litigation with the contractors that constructed the American Rock Salt mine.
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