Moody's assigns Arias loan B2, notes Caa1

Moody's Investors Service said it assigned a B2 corporate family rating to Arias Acquisitions Inc., the holding company for HBW Services, LLC, and assigned a prospective B2 rating to Arias' planned $200 million senior secured bank credit facility and a prospective Caa1 rating to Arias' planned $50 million senior subordinated notes.

The credit facility is expected to consist of a $175 million term loan and a $25 million revolving credit facility, the agency said, adding that the proceeds from the proposed financing are expected to be used to pay a substantial dividend to the company's private equity owners, pay a bonus to management, and refinance existing indebtedness.

The outlook is stable.

The ratings assigned by Moody's reflect HBW Services' leading market position, along with its unique strengths, experience and expertise in its niche market of home warranty coverage, the agency added.

Moody's said it is concerned about HBW Services' dependence on the housing market, which is potentially near a cyclical peak and which could face a decline over the medium term.

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