American Industrial Partners (AIP) has signed an agreement to acquire Arrium Ltd.'s Mining Consumables Division, Moly-Cop, forming AIP/MC Holdings LLC. The $1.16 billion acquisition will be funded by $725 million in senior secured notes and a $500 million common equity contribution from the sponsors. A new $125 million asset-based lending (ABL) revolving credit facility (unrated) will also be put in place as part of the transaction. We are assigning our 'B' corporate credit rating to Moly-Cop. In addition, we are assigning a 'B' issue-level rating and a '3' recovery rating to the company's proposed senior secured notes. The outlook is stable, reflecting our view that Moly-Cop will maintain an adjusted debt to EBITDA between 4x and 5x over the next
