Moody's rates Hillman loans Ba3, notes B3

Moody's Investors Service said it assigned a B2 corporate family rating to OHCP HM Acquisition Corp., along with Ba3 (LGD2, 25%) ratings on its proposed senior secured revolving credit facility due May 2015 and senior secured term loan due May 2016 and a B3 (LGD5, 73%) rating on its senior unsecured notes due May 2018. Moody's also said it assigned it a B2 probability of default rating and a SGL-2 speculative grade liquidity rating. The ratings are subject to receipt of final documents.

The agency also affirmed the company's senior secured revolving credit facility R-2, senior secured term loan B-1, senior secured term loan B-2 and delayed-draw senior secured term loan B-3 at Ba2 (LGD2, 17%).

The outlook is stable.

The Hillman Cos., Inc. will be acquired by Oak Hill Capital Partners in a transaction valued at $815 million. At the close of the transaction, a subsidiary will be created and will merge into Hillman, creating a new company, which will be the surviving entity. The Hillman Group, Inc., an indirect, wholly owned operating subsidiary of Hillman, will be the borrower under the credit facilities and notes, Moody's said.

Proceeds will be used to complete the acquisition.

The ratings reflect Hillman's high pro forma debt load, weak credit metrics, low tangible asset coverage and modest size with revenue less than $500 million, Moody's said.

The rating favorably reflects the company's strong market share in its core hardware-related products and related merchandising services, diversified distribution channel and customer base, the agency said, and stable double digit operating margins.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.