Moody’s assigns Optima notes B3, view stable

Moody's Investors Service said it revised Optima Specialty Steel Inc.'s rating outlook to stable from negative and affirmed its B2 corporate family rating, B2-PD probability of default rating and the B2 rating on its $175 million senior secured notes due 2016.

The outlook change reflects the recent improvement in the company's financial leverage and the increased liquidity, reduced interest costs and extended debt maturities expected to result from the company's proposed refinancing.

Moody's also assigned a B3 rating to Optima's proposed $300 million senior secured notes due 2019.

The proceeds will be used to acquire Corey Steel Co., increase the company's liquidity, pay transaction fees and call premiums and to redeem the company's existing $175 million senior secured notes and $35 million senior unsecured notes, which are both due in December 2016.

The company also plans to establish a new $75 million asset-based lending facility that will mature in October 2019 and replace its current $40 million ABL revolver that is due in April 2016.

The B2 rating on Optima's existing senior secured notes due 2016 will be withdrawn when the notes are redeemed.

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