Moody’s: Keystone Acquisition facilities B1, Caa2

Moody's Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to Keystone Acquisition Corp. (KePRO) following the announcement of its leveraged buyout.

Concurrently, the agency assigned a B1 rating to the company's proposed first-lien revolver and term loan, and a Caa2 rating to the proposed second-lien term loan.

The outlook is stable.

Proceeds from the $205 million first-lien term loan, $100 million second-lien term loan and about $215 million in common equity will fund the leveraged buyout of the company, refinance existing debt and pay transaction fees and expenses.

"The company's debt to EBITDA is around 6 times pro forma for the transaction," Moody's analyst Todd Robinson said in a news release.

"We expect some deleveraging through earnings growth but believe the company's small size, niche focus and significant customer concentration will constrain the ratings in the near-term."

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