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Moody's rates Culligan loan B2
Moody's Investors Service said it gave a B2 rating to AI Aqua Merger Sub, Inc.'s (Culligan) proposed $100 million delayed-draw first-lien term loan due December 2023. All its other ratings remain unchanged, including Culligan's B3 corporate family rating.
“The B2 rating on the company's first-lien term loans reflects these facilities priority position in the pledged collateral relative to the company's $304 million second-lien term loan (rated Caa2),” the agency said in a press release.
The proposed loan will be available for 12 months and Moody's said it expects the delayed draw term loan will be used to fund future tuck-in acquisitions.
Concurrently with the proposed loan, the company is also repricing about $665 million of first-lien term loan debt. “The repricing improves the company's liquidity because of the anticipated lower interest rate and lower pro forma cash interest expense. The proposed transaction is leverage neutral and Moody's estimates the company's debt/EBITDA financial leverage at around 6.7x as of the fiscal year ended Dec. 31, 2020,” Moody’s said in a press release.
The outlook is unchanged at stable.
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