Moody’s rates Navacord notes B2

Moody’s Investors Service said it gave a B2 rating to the $500 million of seven-year senior secured notes to be issued by Navacord Corp. subsidiary Jones DesLauriers Insurance Management Inc. The notes will be sold to institutional investors.

“According to Moody's, the company's ratings reflect Navacord's growing market presence as the fourth-largest commercial lines insurance broker in Canada generally serving middle market clients. The company has a good mix of business across commercial and personal property & casualty insurance and employee benefits, with specialties in construction and transportation,” the agency said in a press release.

However, Moody’s added, “These strengths are tempered by Navacord's aggressive financial leverage and low fixed charge coverage, execution risk associated with acquisitions, and limited scale relative to other rated insurance brokers.”

The proceeds will be used to partially refinance the company's term loan, and to help fund acquisitions.

The outlook is stable.

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