Moody's: AP Exhaust loan B2

Moody's Investors Service said it assigned a B3 corporate family rating and B3-PD probability of default rating on AP Exhaust Acquisition, LLC.

The agency also said it assigned a B2 (LGD 3) rating to the company's proposed $315 million first-lien senior secured credit facility.

AP Acquisition also will have a $125 million second-lien senior secured term loan.

The proceeds from the term loans, along with new equity, will be used to complete the simultaneous acquisition and merger of AP Exhaust Products, Inc. and CWD, LLC, which will form AP Acquisition, Moody's said.

A stable rating outlook also was assigned.

The ratings reflect AP Acquisition's modest size relative to other global automotive suppliers, no track record operating as one company, exposure to cyclical end markets, significant customer concentration and high leverage, Moody's said.

These challenges are offset by AP Acquisition's good niche market position in its top two products, positive projected free cash flow, adequate liquidity profile and reasonable interest coverage, the agency said.

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