Pricing was adjusted on Sensus Metering Systems' $340 million credit facility after Moody's Investors Service gave the facility a B2 rating. The ratings were not on hand when the facility originally went out at LIBOR plus 3%, a banker said, with the expectation of a higher rating. Upon hearing the negative news on the ratings, the price was increased to LIBOR plus 31/2%, he added. "We wanted to make the rating a non-issue and see that the deal kept very good momentum," he added. The deal is oversubscribed with around 70 investors in the book and $800 million of commitments, the banker said. Standard & Poor's rated the facility B+.
Credit Suisse First Boston and Goldman Sachs are leading the facility backing The Jordan Company and Goldman Sachs Capital Partners' $650 million purchase of Sensus from Invensys. Moody's says the ratings reflect the competitive pressure on many parts of Sensus' businesses, a track record of uneven financial performance, modest free cash flow generation relative to its significant debt leverage and the considerable challenges associated with operating a stand-alone highly leveraged company for the first time. After the transaction, the company will have $490 million of debt or six times reported EBITDA after restructuring charges. The revolver and term loans will contain $35 million and $30 million carve-outs, respectively, for a European facility with a newly created Luxembourg entity as the European borrower. Calls to Sensus officials were not returned.