Moody’s rates Grinding Media, notes B2

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to Grinding Media Inc. (Moly-Cop).

In addition, the agency assigned a B2 rating to the company's proposed $725 million senior secured notes, which is commensurate with the corporate family rating because it will account for all of the debt in the company's capital structure.

The outlook is stable.

Proceeds from the note offering will be used to partially fund the acquisition of Moly-Cop by American Industrial Partners.

Moody’s said the B2 corporate family rating reflects Moly-Cop's modest interest coverage, relatively small size versus other worldwide manufacturers of steel products, lack of end-market diversification and moderate customer concentration.

The company is dependent on the cyclical mining sector for almost all of its revenues, and is particularly exposed to copper mining, which accounted for 64% of fiscal 2016 (ended June 2016) grinding media sales volume, the agency added.

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