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Moody’s rates Arctic Glacier facilities B2
Moody's Investors Service said it assigned Arctic Glacier USA, Inc. (New) a B2 corporate family rating and a B3-PD probability of default rating.
At the same time, the agency assigned a B2 rating to the company's proposed first-lien credit facilities, which will be comprised of a $415 million first-lien term loan and a $60 million revolving credit facility.
The outlook is stable.
At the close of the transaction, all ratings and the outlook for the pre-LBO rated entity Arctic Glacier USA, Inc. will be withdrawn.
Arctic Glacier is in the process of being acquired in a sponsor to sponsor transaction by Carlyle Group for total consideration of about $723 million. Proceeds from the proposed $415 million first-lien term loan, together with $345 million of sponsor contributed equity, will be used to fund the $723 million purchase price of the company, pay roughly $28 million of estimated fees and expenses, and fund $10 million of cash to the balance sheet.
The acquisition is expected to be a deleveraging event for the company based on the proposed capital structure, the agency explained.
"Arctic Glacier's pro forma out-of-the-box debt leverage will be in the mid-5 times range, reflective of a more conservative debt capital structure relative to the pre-LBO entity, and we expect leverage to trend lower over the next few years, largely driven by voluntary debt repayment using free cash flow,” Moody's assistant vice president, analyst Brian Silver said in a news release.
“Although the company is small in terms of revenues, it maintains a strong presence in the regions where it competes in the highly fragmented North American packaged ice industry."
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