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Moody’s raises Zekelman, notes
Moody's Investors Service said it upgraded Zekelman Industries, Inc.'s (formerly JMC Steel Group, Inc.) corporate family rating to B2 from B3, probability of default rating to B2-PD from B3-PD and senior secured notes to Caa1 from Caa2.
The outlook is stable.
Moody’s said the upgrades reflect the recent significant improvement in the company's operating performance and credit metrics and the expectation they will improve further in the near-term.
The agency affirmed the B2 rating on Zekelman's senior secured term loan because it represents the largest proportion of debt in the company's capital structure and is unlikely to be paid down in the near-term. The company will likely use its free cash flow to pay off its revolver borrowings and to build up its cash balance to partially fund the pending acquisition of Western Tube & Conduit Corp. Additional borrowings may also be needed to fund a portion of the acquisition.
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