Moody’s rates BBB Industries, loans

Moody's Investors Service said it assigned GC EOS Buyer, Inc. (BBB Industries LLC) a B3 corporate family rating and a B3-PD probability of default rating.

Concurrently, the agency assigned a B3 rating to the company's proposed senior secured first-lien term loan and a Caa2 rating to its proposed second-lien term loan.

All existing ratings for the pre-LBO entity (BBB Industries U.S. Holdings, Inc.) will be withdrawn upon closing of the proposed transaction and concurrent repayment of the underlying debt obligations.

The outlook is stable.

"BBB Industries' very high leverage, [Moody's expects adjusted debt/EBITDA of 6.8x at the end of 2018] coupled with limited projected free cash flow, constrains the ratings," Moody’s lead analyst Inna Bodeck said in a news release.

"However, strong organic growth prospects, good margins and the relatively non-discretionary nature of its products provide the company with opportunities to grow earnings and subsequently reduce leverage."

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