Moody's rates Edgen Murray loans B3

Moody's Investors Service said it assigned a B2 corporate family rating to Edgen Murray II, LP, which is the holding company parent of the companies formerly named Edgen Corp. and Pipe Acquisition Ltd. Moody's also assigned a B3 (LGD4, 58%) rating to the company's $425 million seven-year first-lien term loan and a B3 (LGD4, 67%) rating to the $75 million eight-year second-lien term loan.

The corporate family rating reflects Edgen Murray's high leverage, small size, negligible tangible assets, modest retained cash flow, as well as aggressive growth and limited operating history as a combined entity, the agency said.

The rating is constrained by Edgen Murray's exposure to the highly volatile steel, oil and gas industries and the lack of clarity regarding its financial policies and financial resources for dealing with this volatility, Moody's said.

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