Moody’s assigns Aston Escrow notes B3

Moody's Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to Aston Escrow Corp. in connection with the acquisition of Transworld Systems, Inc. (a carve-out of Expert Global Solutions, Inc.), by Platinum Equity Advisors.

The agency also assigned a B3-LGD4 rating to a proposed, $440 million senior secured notes issuance, the proceeds from which, along with cash equity from Platinum, will be used to purchase Transworld and pay related fees and expenses.

At the closing of the transaction, Aston will merge with and into Transworld, which will be the borrower post-merger.

The outlook is stable.

Moody’s said a handful of uncertainties surrounding Platinum's acquisition of Transworld pressures the credit rating of what is otherwise a not overly aggressive purchase of a soundly profitable target company, albeit one that faces real business risks. Those risks include customer concentration, a stagnant revenue base that is susceptible to regulatory changes and the lack of an operating track record as a standalone entity that would give investors comfort with Transworld’s post-carve out cost structure.

Moody’s said the B3 rating allows for weaker than anticipated performance at Transworld, whose top line has been spotty in the recent past, and which will now be overseen by a private equity firm with leeway to pursue shareholder-friendly financial policies.

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