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Moody’s gives Atkore loan Ba1
Moody's said it gave a Ba1 rating to Atkore International Inc.’s planned $400 million term loan B.
“The Ba1 rating assigned to the first lien term loan is one notch above Atkore's Ba2 corporate family rating since it benefits from a first priority lien on the tangible and intangible assets not securing the ABL revolver and a second lien on the ABL collateral. It is also supported by the loss absorbing buffer provided by the proposed unsecured debt,” Moody’s said in a press release.
The company plans to use the proceeds along with the proceeds from the issuance of $400 million of other unsecured debt to pay off the outstanding term loan and to cover fees and expenses. The rating on that term loan will be withdrawn when it is paid off.
Concurrently, the agency upgraded Atkore’s corporate family rating to Ba2 from Ba3 and its probability of default rating to Ba2-PD from Ba3-PD.
"The upgrade of Atkore's ratings reflects the significant improvement in the company's operating performance and credit metrics and the expectation they will improve further in the near term. It also reflects the sustainability of its operating performance at a higher level than the past due to its strengthened competitive position and focus on margin and productivity improvements, as well as its relatively conservative financial policies," said Michael Corelli, Moody's Senior Vice President and lead analyst for Atkore International, Inc.
The agency also raised Atkore's speculative grade liquidity rating to SGL-1 from SGL-2.
Moody’s changed the outlook to positive from stable. The outlook reflects an expectation that its operating results will surge in fiscal 2021 before weakening in fiscal 2022, but that its credit metrics will remain strong for the current rating, the agency said.
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