Moody's rates Henniges loan B1

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to Henniges Automotive Holdings, Inc. and a B1 (LGD3, 43%) rating to Henniges' new $285 million senior secured term loan due 2021. The $50 million asset-based revolving credit facility is not rated by Moody's. The outlook is stable.

Proceeds from the new term loan and cash on hand will be used to refinance the company's existing debt, make a shareholder distribution to its equity sponsors (affiliates of Littlejohn & Co., LLC) and add cash to its balance sheet.

The agency said Henniges' B2 corporate family rating incorporates the company's high leverage following the planned sponsor dividend, modest size and high customer concentrations. Pro forma for the proposed recapitalization and shareholder distribution, Henniges' ratio of debt to EBITDA is estimated at 5.2 times (including Moody's standard adjustments) for the last 12 months ended March 31.

In Moody's view, Henniges' ratings benefit from the company's position and long history as a leading North American manufacturer of sealing systems (about 82% of revenues) and vibration control products.

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