Moody's rates Jurassic/Nesco notes Caa1

Moody's Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to Jurassic Holdings III, Inc. and a Caa1 (LGD4, 67%) rating to the $500 million senior secured second-lien notes to be issued by Jurassic and Nesco Finance Corp. The outlook is stable.

Jurassic will merge with Nesco, LLC in conjunction with its acquisition by affiliates of Energy Capital Partners in a transaction valued at about $875 million, with Nesco as the surviving entity. Nesco has a B3 corporate family rating and a B3-PD probability of default rating, its senior secured bonds due 2017 are rated Caa1 (LGD5, 75%), and its outlook is stable.

The company's new $250 million five-year ABL revolver is unrated.

The agency said Nesco's B3 corporate family rating reflects the company's high leverage, small scale and limited end-market diversity given its focus on the electric power transmission and distribution industry. The pro forma ratio of debt to EBITDA is about 6 times as of Sept. 30.

In Moody's view, factors that help mitigate these risks include the company's established position within its niche product market, its geographic diversification and footprint in North America, expectation for relatively consistent demand for its equipment and its strong operating margins.

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