Moody’s rates Phoenix Services, facilities B2

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to Phoenix Services International LLC.

In addition, the agency assigned a B2 rating to Phoenix Services Merger Sub, LLC's proposed $65 million senior secured revolving credit facility and its $465 million senior secured term loan.

The facility ratings are commensurate with the corporate family rating because the revolver and the term loan will share in the same collateral package and will account for virtually all of the debt in the company's capital structure.

Term loan proceeds will be used to fund a significant portion of the acquisition of Phoenix Services (Metal Services LLC) by Apollo Global Management.

The outlook is stable.

The existing ratings at Metal Services LLC will be withdrawn when the acquisition by Apollo is completed.

Moody’s said the B2 corporate family rating is supported by the company’s strong market position, highly variable cost structure and the downside protection afforded by the company's long-term contracts with fixed fees and tiered pricing.

“It also reflects the high margins it has generated through various steel sector cycles, its ability to achieve consistent growth in the number of sites it serves, its variable maintenance expenditures and good liquidity,” the agency added in a news release.

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