Moody's rates Pelican B3, loans B2

Moody's Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to Peacock Intermediate Holding II, LP in conjunction with the debt funded acquisition by funds of Platinum Equity Advisors, LLC.

Moody's also assigned B2 ratings to the expected $40 million senior secured revolving credit facility and $525 million senior secured first-lien term loan to Pelican Products, Inc., a wholly owned operating subsidiary of Peacock.

“The B3 CFR reflects the company's very high financial leverage, modest scale and the fragmented and competitive landscape in which it operates. The company is exposed to cyclical end markets, including consumer and commercial segments that represent about 11% and 36% of revenues, respectively, which are susceptible to rapid changes in consumer tastes,” the agency said in a press release.

Proceeds from the new senior secured credit facilities, the new, unrated$200 million senior secured second-lien term loan and $684 million of equity, will be used to fund the $1.4 billion purchase of the company by Platinum Equity as well as pay transaction fees and expenses. The outstanding debt at Pelican Products will be repaid and all existing ratings at that entity will be withdrawn at the deal’s close, Moody’s said.

The outlook is stable, incorporating expectations of top-line growth of about 5% over the next two years and operating efficiency initiatives delivering cost reductions, the agency said.

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