Moody's rates B/E Aerospace loans Ba3

Moody's Investors Service said it assigned a Ba3 rating to B/E Aerospace, Inc.'s new $450 million senior secured credit facilities, which include a $150 million revolving credit facility due 2011 and $300 million term loan due 2012. The company's B1 corporate family rating, B3 senior subordinated notes and B1 senior unsecured notes were affirmed.

The outlook was changed to positive from stable, which anticipates that in a continued strong market for commercial aircraft suppliers expected over the next 18 months, B/E should achieve robust organic revenue growth while maintaining, or possibly improving, its operating margins, the agency said.

The new term loan facility will be used to restore about $100 million of cash to the company's balance sheet and to repay $275 million of interim financing, which B/E used to fund a tender offer for its $175 million senior notes due 2010 and the $80 million acquisition of Draeger Aerosystems GmbH.

The ratings reflect the company's strengthening credit metrics associated with strong business volumes, improved margins and the repayment of a substantial amount of subordinated debt, according to the agency.

Moody's said the ratings are still constrained, however, by relatively thin historical free cash flow levels, concentration of sales in a relatively narrow product band and longer-term uncertainty surrounding conditions in the cyclical commercial aerospace sector.

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