Moody’s assigns B2 to ATS Automation notes

Moody's Investors Service said it assigned ATS Automation Tooling Systems Inc. a Ba3 corporate family rating, Ba3-PD probability of default rating, a B2 rating to its proposed senior unsecured notes and an SGL-2 speculative grade liquidity rating.

The outlook is stable.

Net proceeds will be used to repay amounts outstanding under the company’s revolving credit facility.

Moody’s said the Ba3 corporate family rating primarily reflects ATS' strong credit metrics, good diversity by end-market and geography, and good liquidity. The rating also considers the company's public long-term leverage target that provides flexibility for its acquisition strategy.

These attributes are mitigated by the company's small scale, cyclical demand and acquisition execution risk.

The rating assumes low single digit revenue growth through the next 12 to 18 months, reflective of global economic conditions, the agency said. Credit metrics are expected to be maintained at levels of strength for the rating in this timeframe.

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