Moody's gives Advanced Drainage loan Baa3

Moody's Investors Service said it assigned a Baa3 rating to Advanced Drainage Systems, Inc.'s senior secured revolving credit facility it is boosting to $600 million from $350 million. The rating on the $350 million credit facility will be withdrawn.

ADS' Ba1 corporate family rating and Ba1-PD probability of default rating are unaffected by the upsizing, the agency said. Also, the Baa3 rating on ADS' senior secured term loan maturing 2026 and the Ba2 rating on the company's senior unsecured notes due 2027 are not affected by the additional commitment. The company's speculative grade liquidity rating is maintained at SGL-1. The outlook is stable.

“Moody's views the transaction as credit positive since liquidity is improving. The 71.4% increase in the size of the revolving credit facility gives ADS significant financial flexibility to contend with rising costs and ongoing supply chain challenges. ADS also extended the expiration of the revolving credit facility to 2027 from September 2024, but with a springing maturity, which is six months prior to the senior secured term loan maturing in September 2026. ADS has no material maturities over the next four years,” the agency said in a press release.

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