Moody's rates Quality Home loans B1, Caa1

Moody's Investors Service said it assigned Quality Home Brands Holdings LLC a Caa1 corporate family rating and a Caa1 probability-of-default rating, along with a B1 (LGD1, 2%) rating on its $20 million senior secured revolving credit facility due 2014, Caa1 (LGD3, 47%) rating on its $126 million senior secured cash-pay term loan due 2014 and Caa1 (LGD3, 47%) on its $106 million senior secured payment-in-kind term loan due 2014.

The ratings were assigned in conjunction with the company's recent emergence from bankruptcy on Jan. 15.

The outlook is stable.

The ratings reflect the company's high post-emergence leverage, modest interest coverage and exposure to the still weak residential and commercial construction end-markets, Moody's said.

Given expectations for limited free cash flow generation, deleveraging will have to come from earnings expansion, the agency said.

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