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Moody’s rates Wesco facilities B1
Moody's Investors Service said it affirmed its ratings for Wesco Aircraft Hardware Corp., including the B1 corporate family rating and B2-PD probability of default rating.
A B1 rating was assigned to Wesco's new senior secured credit facilities comprised of a $200 million five-year revolver and a $400 million five-year term loan A.
Wesco plans to use the proceeds to refinance its existing revolving and term loan A facilities that mature in 2017 and Moody's expects to withdraw the ratings on these facilities upon close of the transaction.
The outlook was changed to positive from stable.
Moody’s said the positive outlook reflects expectations that Wesco will continue to generate relatively robust levels of free cash flow and that these internally generated funds will be used to pay down existing debt.
This prioritization of debt reduction coupled with modest earnings growth is expected to result in an improving credit profile with debt-to-EBITDA projected to be below 4 times by the end of FY 2017 and increasing levels of financial flexibility over the next 12 to 18 months.
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