Moody's rates GeoStabilization loans B2

Moody's Investors Service said it assigned a B2 (LGD 3) rating to the prospective $25 million senior secured revolving credit facility and a B2 (LGD 3) rating to the $150 million senior secured term loan issued by Geo Parent Corp., which does business as GeoStabilization International.

Moody's also said it assigned a B2 corporate family rating and B2-PD probability of default rating to GeoStabilization.

The outlook is stable.

The term loan proceeds and a cash equity contribution from private equity sponsor, Kohlberg Kravis Roberts & Co., will be used to purchase Geo from its current owner plus pay fees and expenses, Moody's said, and allocate cash to its balance sheet.

The proposed transaction is expected to modestly increase leverage and extend debt maturities, the agency noted.

The ratings reflect the favorable fundamentals that will continue to support investment in transportation infrastructure, Moody's said.

Decades of under-investment has – and will continue – to create considerable demand for geohazard mitigation services, the agency said. A significant portion of the company's revenues are derived from contracts with public transportation infrastructure customers, which provide a relatively stable source of cash flow and help mitigate the volatility of capital and economic cycles, Moody's said.

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