Moody’s rates Esterline notes Ba2

Moody's Investors Service said it assigned a Ba2 rating to TA Mfg Ltd. (UK)'s €330 million (roughly $350 million) unsecured notes due 2023.

TA Mfg is a wholly owned subsidiary of Esterline Technologies Corp.

Concurrently, all of Esterline's existing ratings were affirmed including its Ba1 corporate family rating and SGL-2 speculative grade liquidity rating.

The outlook remains stable.

Proceeds are expected to be used to repay borrowings outstanding under the company's existing senior secured bank credit facility.

The proposed transaction is viewed to be debt neutral as the proceeds from the proposed notes issuance are expected to be used to repay currently outstanding bank debt.

The proposed senior unsecured notes are rated Ba2, one notch below the Ba1 corporate family rating, reflecting their junior position in the capital structure relative to the company's secured credit facility and term loan.

At the same time, Esterline is currently negotiating an amendment and restatement of its existing secured credit facility. The amended credit facility is expected to be comprised of a $500 million revolving facility and a $250 million delayed-draw term loan facility. The company has said that if the delayed-draw term loan were to be used, it is intended to be used for working capital and/or repayment or refinancing of its existing debt and related expenses.

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