Moody's rates Invacare loans Ba2, note B2, convertible B3

Moody's Investors Service said it assigned B1 corporate family and probability-of-default ratings, a loss-given-default rating of LGD4 (50%) and an SGL-2 speculative grade liquidity rating to Invacare Inc.

The agency also assigned Ba2 ratings with loss-given-default assessments of LGD2 (22%) to the company's $250 million term loan B due 2013 and $150 million revolving credit facility due 2012, a B2 rating (LGD4, 68%) to its $175 million senior notes due 2015 and a B3 rating (LGD6, 93%) to its $125 million senior subordinated convertible notes due 2027.

The outlook is stable.

The agency said the ratings reflect its concern that Invacare's overall profitability and cash flow coverage of debt could continue to deteriorate due to unfavorable Medicare reimbursement changes and, to a lesser extent, the competitive pricing in some of its segments. In addition, the company's cash coverage of debt ratios, operating margins and return on assets are at the low end of the single B category.

Moody's said Invacare benefits from scale and diversification and low research and development spending as a percentage of revenues, which reflect an investment grade credit profile.

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