Moody’s affirms AVSC Holding

Moody's Investors Service said it affirmed AVSC Holding Corp.'s B3 corporate family rating and B3-PD probability of default rating in connection with the company's announcement of a leveraged buyout.

At the same time, the agency affirmed the B2 ratings on the company's first-lien senior secured credit facilities, including the existing $100 million revolver and an upsized $1.23 billion first-lien term loan (increased from $1.105 billion), as well as the Caa2 rating on the $210 million second-lien term loan.

The outlook is stable.

Proceeds from the incremental first-lien term loan along with new common equity will be used to fund a buyout of AVSC by private equity and real estate funds affiliated with Blackstone Group, LP from affiliates of Goldman Sachs and Olympus Partners.

The agency said that despite the increase in leverage, the ratings were affirmed because it expects the company’s debt to EBITDA leverage to decline to a high 6 times range and free cash flow to debt to be sustained above 3% over the next 12 to 18 months.

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