Moody's keeps Atrium on review for downgrade

Moody's Investors Service said it affirmed ACIH's speculative grade liquidity rating at SLG-4 and kept the remaining ratings of ACIH and Atrium Cos., Inc. under review for possible downgrade pending the receipt of bank waivers and amendments and approval of its pending acquisition of a window manufacturer.

Ratings on review include ACIH's B2 corporate family and probability-of-default ratings and Caa1 (LGD6, 90%) $174 million senior discount notes due 2012 and Atrium's B1 (LGD3, 37%) $378.5 million senior secured term loan B due 2012 and $50 million senior secured revolving credit facility due 2011.

The ratings were first placed on review on Oct. 30 to reflect concerns related to Atrium's acquisition strategy, covenant compliance and business performance. The agency said it expects to affirm the ratings with a negative outlook once the company receives the waivers, amendments and approval.

The negative outlook would reflect the anticipated and continued impact of the homebuilding and remodeling slowdown on Atrium's sales and cash flow generation and the company's significant revenue contribution from markets that are currently experiencing a slowdown, Moody's said.

ACIH is an intermediate holding company that is structurally below Atrium Corp., the ultimate parent company, but above Atrium Cos., Inc., the primary operating company. The agency said the affirmation of ACIH's speculative grade liquidity rating reflects increased tightness under the covenants governing the senior secured credit facilities due to softening market conditions and the expectation that the company's free cash flow generation will be slightly positive over the next four quarters.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.