Moody’s rates Titan Purchaser loan B2

Moody's Investors Service assigned first-time ratings to Titan Purchaser, Inc., including a B2 rating to its planned $330 million senior secured term loan, a B1 corporate family rating and a B1-PD probability of default rating. The outlook is stable.

The rating assignments follow the company's plan to raise new senior secured debt, comprised of an unrated $150 million asset-based lending facility and a first-lien term loan, the agency said.

“Titan Purchaser's ratings reflect Waupaca's strong competitive position as a manufacturer of iron casting components in North America and significant progress in reducing reliance on the low-margin light vehicle automotive market. Modest leverage and expectations for sharply higher margins boosted by the closures of two loss-generating plants, a revamped surcharge mechanism, and a renewed focus on pricing also support the ratings,” Moody’s said in a statement.

The loan proceeds will be used to fund Monomoy Capital Partners' acquisition of Titan Purchaser, parent company of operating subsidiary Waupaca Foundry, Inc. The remaining financing is comprised of cash equity from Monomoy.

In explaining the stable outlook, Moody’s said it expects “flat-to-modestly higher revenue for fiscal 2024 but with significant margin expansion and solidly positive free cash flow resulting from improving pricing power and higher plant utilization.”

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