Moody’s gives Amsted notes Ba3

Moody’s Investors Service said it assigned a Ba3 rating to Amsted Industries Inc.’s new senior unsecured notes due 2030. The Ba2 corporate family rating and the Ba2-PD probability of default rating are unchanged. The outlook for Amsted remains stable.

Proceeds will be used to redeem all $250 million of Amsted’s senior secured notes due 2024, as well as to repay a portion of the company’s senior secured revolver borrowings, making the transaction nearly debt-neutral.

The Ba3 ratings of Amsted’s senior unsecured notes are one notch below the Ba2 CFR, reflecting their effective subordination to the $900 million revolver and about $200 million term loan due 2024, Moody’s said.

“The Ba2 corporate family rating reflects Amsted’s leading market position in its core segments of railroad and vehicular products, attractive operating margins that are expected to be in the 13%-14% range, and good cash flows throughout industry cycles. Although Moody’s expects continued weakness in demand for rail equipment and Class 8 truck production in 2020, Amsted should generate strong free cash flow of at least $250 million annually over the next few years, representing nearly 30% of total debt. As well, the company maintains moderate debt levels, with debt-to-EBITDA expected to stay close to 2x,” said Moody’s in a press release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.