Moody's rates Standard Aero

Moody's Investors Service said it assigned a B2 rating to Standard Aero Holdings Inc.'s proposed senior secured credit facilities and a Caa1 rating to the company's proposed senior subordinated notes.

Specifically, Moody's assigned a B2 rating to the company's proposed $310 million senior secured credit facilities, consisting of a $50 million revolver due 2010 and a $260 million term loan B due 2012, a Caa1 rating to the company's proposed $265 million senior subordinated notes due 2014, a B2 senior implied rating, and a B3 issuer rating. In addition Moody's has assigned a speculative grade liquidity rating of SGL-3.

The outlook is stable.

Proceeds from the proposed offerings will be used to finance the acquisition of the engine maintenance, repair and overhaul business (EMRO) of Dunlop Standard Aerospace Holdings by The Carlyle Group for total consideration of $675 million.

Moody's said the ratings reflect the company' high debt levels resulting from the levered acquisition of DSA' EMRO division, thin cash flow relative to debt, modest liquidity position, and significant customer and product concentration in the new Standard Aero EMRO operations.

The ratings also recognize Standard Aero's stable, recurring revenue base, its strong market position in the engine platforms in which it competes, and the potential benefits of recent MRO contract wins.

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