Moody's lowers Axia loans to B3

Moody's Investors Service said it downgraded Axia, Inc.'s corporate family rating to B3 from B2 and its probability-of-default rating to Caa1 from B3. Moody's downgraded the company's $175 million senior secured bank credit facility to B3 (LGD3, 33%) from B2 (LGD3, 31%).

The outlook is stable.

The downgrade results from ongoing decline in demand for Axia's products due to slumps in homebuilding and renovations. Moody's said it expects the issuer's debt-to-EBITDA leverage to rise above 6 times.

Moody's said the B3 corporate family rating reflects the company's small size, high financial leverage, weak free-cash-flow and dependence on residential homebuilding.

Partly mitigating factors are the company's leading market position, strong brand recognition, broad geographic diversification and strong EBITDA margins, according to the agency.

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