Moody’s cuts Omnitracs, rates loans B2, Caa2

Moody’s Investors Service said it downgraded Omnitracs, LLC’s corporate family rating to B3 and probability of default rating to B3-PD in connection with the company’s pending acquisition of SmartDrive Systems, Inc.

Concurrently, Moody’s assigned a B2 rating to Omnitracs’ proposed $160 million incremental first-lien senior secured term loan due 2025 and Caa2 rating to the $195 million second-lien senior secured term loan due 2028.

Proceeds, cash on hand and rollover equity will be used to acquire SmartDrive.

“The downgrade to B3 from B2 reflects Omnitracs’ increased gross debt and leverage and elevated execution risk given the size of the target company, which will initially add limited incremental EBITDA,” Moody’s said in a press release.

Moody’s also affirmed Omnitracs’ B2 ratings on its first lien credit facility consisting of a $50 million first-lien senior secured revolving credit facility due 2023 and a $745 million senior secured term loan due 2025. The outlook remains stable.

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