Moody’s cuts, rates Robertshaw loans

Moody's Investors Service said it assigned ratings to Robertshaw US Holding Corp.’s new senior secured bank credit facilities under its new super-priority credit agreement following a distressed exchange offer, including a B2 rating to the first-out facility, Caa3 rating to the second-out facility and Ca ratings to the third-out facility, fourth-out facility and fifth-out facility, respectively.

Moody's also downgraded the ratings on the first-lien term loan to C from Caa2 and on the second-lien term loan to C from Ca.

Finally, Moody's affirmed Robertshaw’s Caa3 ratings and changed the outlook to stable from negative.

“The debt instrument ratings reflect their priority rankings in the capital structure and Moody's expectation of recovery. Moody's applied a one-notch negative override on the third-out, fourth-out and fifth-out facilities in its loss-given default (LGD) analysis to reflect the likelihood of no recovery for these facilities behind the ABL, first-out facility and second-out facility in the event of a default. The ABL revolver has a first-priority interest on the most liquid collateral. The C rating on the existing first-lien and second-lien term loans reflects their deeply subordinated position in the capital structure,” the agency said in a press release.

The improved outlook follows the company’s healthier cash position and no looming refinancing risk after repayment of the euro term loan, which would have been due in December, with transaction proceeds.

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