Moody's assigns B2 to Reedy

Moody's Investors Service said it assigned a B2 rating to the prospective senior secured first-lien credit facilities of Thermostat Purchaser III, Inc. (Reedy Industries), including a $325 million term loan, $76 million delayed-draw term loan, and $65 million revolving credit facility.

In addition, Moody's assigned a B3 corporate family rating and B3-PD probability of default rating to Reedy. This is the first time Moody's has assigned ratings to Reedy Industries.

“Reedy Industries' B3 CFR reflects the company's high debt leverage, which will be 7.8x on a pro forma basis for the transaction as of March 27, 2021 and Moody's expects leverage to decline to 6.7x by the end of 2021 and then 6.1x by 2022,” the agency said in a press release.

The term loan proceeds will be used in conjunction with an unrated $94 million second-lien term loan, management and existing ownership rollover equity, and new cash equity from new sponsors, Partners Group to acquire Reedy Industries.

The outlook is stable.

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