Moody's rates Atrium loans B1, notes B3

Moody's Investors Service said it assigned a B1 rating to the new senior secured bank credit facilities of Atrium Cos. Inc. and a B3 rating to the senior discount notes issued at Atrium Corp.

More specifically, Moody's assigned a B1 rating to Atrium Cos. Inc.'s $50 million five-year revolver and $325 million seven-year term loan B. Moody's assigned a B3 rating to Atrium Corp.'s $125 million senior discount notes due 2012, a B1 senior implied rating and a B3 issuer rating.

The outlook remains stable but would deteriorate with even a modest increase in leverage, the agency said.

Proceeds are being used to fund the tender for $225 million of outstanding 10.5% senior subordinated notes due 2009 and to refinance the existing term loan B.

Moody's said the ratings reflect the company's good revenue growth and modest free cash flow generation. The ratings also benefit from the company's position as the largest non-wood window manufacturer in the USA, the growing demand for impact resistant windows, and ongoing need for replacement windows due to normal wear and tear.

The ratings are constrained by the company's high leverage for the ratings category and its history of acquisitions thereby suggesting that aggressive debt pay-down is unlikely, the agency said.

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