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Moody's rates Chem Rx loans B1, Caa1
Moody's Investors Service said it assigned a B1 rating (LGD3, 34%) to Chem Rx Corp.'s proposed $25 million senior secured revolver due 2012, proposed $90 million senior secured term loan due 2013 and proposed $20 million delayed-draw term loan due 2013.
The agency assigned a Caa1 rating (LGD5, 84%) to the company's proposed $42 million second-lien term loan due 2014. Moody's also assigned B2 corporate family and probability-of-default ratings and an SGL-3 speculative grade liquidity rating.
The outlook is stable.
Proceeds from the credit facilities will be used to help finance the purchase of Chem Rx by Paramount and to repay Chem Rx's existing debt.
"Over the near term, the company's free cash flow cushion will likely remain tight and may experience a decline resulting in negative free cash flow to debt," Sidney Matti, S&P analyst, said in a written statement.
The issuer has an adjusted debt-to-EBITDA ratio of less than 5 times, according to Moody's.
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