Moody’s rates Aramsco, loans B3

Moody's Investors Service said it assigned first-time ratings to Aramsco, Inc., including a B3 corporate family rating and a B3-PD probability of default rating. The agency also assigned B3 ratings to Aramsco's planned senior secured first-lien term loan and senior secured first-lien delayed-draw term loan. The outlook is stable.

“The B3 CFR assignment reflects governance considerations including the company's private equity ownership and high pro forma leverage. Post-acquisition and accounting for EBITDA from acquired companies, Moody's debt/EBITDA is close to 6x for the LTM period ending June 30, 2023. Private equity owners tend to have aggressive financial strategies favoring high leverage with a higher potential for dividend recapitalizations and the pursuit of debt-financed acquisitions,” the agency said in a statement.

The proceeds will be used to complete the acquisition of Aramsco by American Securities LLC. Aramsco's capital structure will consist of an $80 million asset-based revolving credit facility expiring in 2028 and a $430 million senior secured term loan maturing 2030.

“The stable outlook reflects Moody's expectation of adequate liquidity and that the company will continue to successfully integrate its acquisitions as it executes its growth strategy,” the agency said.

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