Moody’s provides B1 to Airxcel CFR, notes

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to Airxcel, Inc.

Concurrently, the agency assigned a B2 rating to the company's proposed $300 million senior secured notes.

The outlook is stable.

Proceeds from the notes will be used to fund a dividend, to refinance all existing debt and to cover fees and expenses. The new capital structure will also consist of a $40 million ABL revolver (unrated), which will be undrawn at close.

"Financial leverage at 5.1 times pro forma for the transaction and the acquisitions of MCD Innovations and Dicor Corp. (both completed in September 2016) is high given the company's small size, significant customer concentration and exposure to the cyclical RV market," Moody's analyst Todd Robinson said in a news release.

"However, Moody's expects stable end market demand will result in low single digit earnings growth and that leverage will decline to around 4.5 times over the next 12 to 18 months."

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