Moody's rates Token Buyer loans B2, Caa2

Moody's Investors Service said it assigned the planned first-lien senior secured term loan and revolver for Token Buyer, Inc. (Therm-O-Disc Inc.) B2 ratings and gave a Caa2 rating to its proposed second-lien term loan. The agency also gave the company a B3 corporate family rating and a B3-PD probability of default rating.

“Therm-O-Disc Inc.'s (TOD) B3 CFR reflects the company's modest revenue base and risks stemming from its planned carveout from Emerson Electric Co. (Emerson). The rating also reflects the potential for revenue volatility given TOD's limited recurring, or aftermarket, business. This is due to the long-lasting nature of TOD's products which are built to outlast the useful life of the appliances or systems into which they are incorporated. Moody's projects leverage will remain high, with pro forma debt/EBITDA remaining above 6x in 2022, the agency said in a press release.

Term loan proceeds, along with equity from One Rock Capital Partners LLC, will primarily be used to fund the acquisition of Therm-O-Disc.

The outlook is stable.

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