Moody's rates Koosharem loans B1, Caa1

Moody's Investors Service said it assigned a B1 (LGD3, 34%) rating to the Koosharem Corp.'s proposed $300 million first-lien credit facility and a Caa1 (LGD5, 86%) rating to the proposed $100 million second-lien credit facility. The agency also affirmed the company's B2 corporate family rating.

The outlook is stable.

The proceeds will be used to refinance existing secured debt, to provide financing for the acquisition of Ablest Inc. and to fund an $80 million dividend to shareholders.

The rating reflects solid credit metrics, Moody's said. Despite added debt of $117 million, the company financials remain solid due to growing profitability and cost synergies after acquiring RemedyTemp Inc. in June 2006.

The ratings remain constrained by revenue concentration in California, the industry's low barriers to entry, earnings and margin cyclicality and ongoing integration risks, the agency said.

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