Moody's: OM Group loan at Ba2

Moody's Investors Service said it assigned a Ba2 corporate family rating to OM Group, Inc. and assigned Ba2 (LGD3, 39%) ratings to the company's $200 million senior secured revolver, $100 million senior secured term loan A and $600 million senior secured term loan B.

A speculative-grade liquidity rating of SGL-1 was also assigned to the company.

The outlook is stable.

Proceeds from the facilities along with $170 million from OM Group's existing cash balances and $50 million of OM Group equity will be used to fund the purchase of Vacuumschmelze GmbH & Co. KG, to repay existing OM Group and VAC debt and for transaction fees and other acquired liabilities.

The ratings consider OM Group's significant operational and geographic diversity, meaningful market shares, value added nature of many products, strong cash flows, longstanding customer relationships and exposure to markets growing more quickly than GDP, the agency said.

The ratings are tempered by the potential for additional leverage to fund future grow opportunities, exposure to volatile cobalt metal and rare earth metal commodity prices, potential fluctuations in operating profits, size and uncertainties associated with raw material supplies, the agency added.

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