Moody’s cuts Wesco, gives notes B2

Moody’s Investors Service said it downgraded Wesco International, Inc.’s corporate family rating to B1 from Ba3, probability of default rating to B1-PD from Ba3-PD and speculative grade liquidity rating to SGL-2 from SGL-1.

Moody’s also downgraded the rating on the company’s senior unsecured notes at Wesco Distribution, Inc. to B2 from B1

The agency revised the outlook to stable from ratings under review. This action concludes the review the agency started on Jan. 14.

Concurrently, Moody’s assigned a B2 rating to the company’s proposed $2.825 billion in new senior unsecured notes, to be sold in five- and eight-year tranches.

Proceeds will be used to redeem the senior unsecured notes of Anixter International Inc., totaling about $940 million, and partially finance the planned acquisition of Anixter.

“The downgrade of Wesco’s existing ratings reflects the substantial increase in leverage associated with the acquisition of Anixter. Moody’s estimates that pro forma debt-to-EBITDA would increase to 6.1x from 4x as of March 31, 2020. Moody’s also recognizes the heightened integration and execution risk given the magnitude of the transaction, which will double the size of the company,” the agency said in a press release.

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