Add to balance / Manage account | User: | Log out |
Prospect News home > News index > List of issuers A > Headlines for American Tire Distributors, Inc. > News item |
Moody's rates American Tire notes Caa1
Moody's Investors Service said it assigned a Caa1 (LGD5) rating to $805 million of subordinated notes due 2022 to be issued by ATD Finance Corp., which will merge with and into American Tire Distributors, Inc., and affirmed American Tire Distributors’ B2 corporate family rating, B2-PD probability of default rating, B2 (LGD3) senior secured term loan rating and SGL-3 speculative grade liquidity rating. The outlook remains stable.
Note proceeds will be used to redeem all of the company’s existing senior subordinated notes and to fund an estimated $351 million dividend to equity sponsor TPG Capital, LP. Concurrently, affiliates of Ares Management, LP will purchase 46.7% equity in the company from TPG, with both sponsors retaining equal ownership and controlling interest in the company.
Moody's believes that the proposed transaction represents an aggressive financial policy, as the company will use the incremental debt primarily to return capital to TPG after having undertaken a sizable debt-financed acquisition program in 2014.
Nonetheless, the agency said it affirmed the ratings based on expectations that that company will deleverage in the next 12 to 18 months.
American Tire Distributors has been “a solid performer, and given current industry tailwinds and our expectation for moderate organic growth, we expect leverage to decline to low 6.0 times range by the end of fiscal 2015," Moody's analyst Oleg Markin said in an agency news release.
© 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.