Moody's rates SAIC loan Ba2

Moody's Investors Service said it assigned a Ba2 rating to the planned senior secured bank credit facility of Science Applications International Corp. (SAIC).

The company's existing debt ratings, speculative grade liquidity rating of SGL-2 and negative outlook are unaffected.

The proceeds will be used to refinance the debt of Science Applications and of Engility Corp. because Science Applications is in the process of acquiring Engility's parent.

That merger is anticipated to be completed before year end, the agency said.

Moody's said it will withdraw all of the ratings of Engility, once Engility's outstanding debts have been repaid.

The ratings reflect the company's broad agency coverage and diversity of service revenue that will follow the combination, with about 23,000 employees and 69% of them holding a security clearance, the agency said.

Acquiring Engility will give Science Applications a greater degree of revenue from direct labor rather than from materials and subcontractors, which should enhance margin, Moody's said.

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