Moody's gives Echo B2, loans B1

Moody's Investors Service said it gave first-time ratings to Echo Global Logistics, Inc., including a B2 corporate family rating and a B2-PD probability of default rating. The agency also assigned a B1 rating to Echo Global's planned first-lien credit facilities, including a proposed $100 million revolving credit facility and a $550 million term loan.

“The B2 corporate family rating is constrained by Moody's expectation for aggressive financial policies and high financial leverage over the next 12-18 months. Under new private equity ownership, we anticipate that Echo Global will complement its historically organic growth strategy with acquisitions to add capabilities given the very fragmented nature of the third-party logistics ("3PL") market. Moody's expects Echo Global's adjusted debt/EBITDA to moderate to around 5.5 times by the end of 2022, down from approximately 6.9 times at June 30, 2021 on a pro forma basis,” the agency said in a press release.

Proceeds from the first-lien debt, along with $743 million of cash equity, will be used to finance the $1.4 billion acquisition of the company by affiliates of the Jordan Co., LP.

The outlook is stable.

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