Moody's ups ATI, rates loans B1

Moody's Investors Service said it upgraded ATI Holdings Acquisition, Inc.'s corporate family rating to B1 from B3, its probability of default rating to B1-PD from B3-PD and the ratings on the company's senior secured ratings to B1 from B2. Moody's also assigned a B1 rating to the company's planned $150 million five-year revolving credit facility and $570 million seven-year first-lien term loan. and assigned an SGL-1 speculative grade liquidity rating.

“The two-notch upgrade of the company's corporate family rating reflects the company's material reduction in debt following its business combination with Fortress Value Acquisition Corp II. ATI has repaid approximately $448 million of debt following the conclusion of this business combination. Adjusted Debt/EBITDA improved from approximately 6x to 4x pro-forma for the debt payment for the LTM period ended March 31, 2021,” Moody’s said in a press release.

The upgrade of the company's first-lien debt reflects the two-notch upgrade in ATI's corporate family rating, and that there is no longer any loss absorption provided by junior ranking debt since the company repaid it in full its unrated $231 million second lien term loan, the agency said.

The new facilities’ proceeds will repay the current facilities at close, Moody’s said, in a largely leverage-neutral transaction.

The outlook remains stable.

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