Moody's rates Federal-Mogul loans B1

Moody's Investors Service said it assigned B1 (LGD3, 39%) ratings to Federal-Mogul Holdings Corp.'s $500 million senior secured tranche B term loan due 2018 and $2.1 billion senior secured tranche C term loan due 2021 and affirmed Federal-Mogul Corp.'s corporate family rating at B2, probability of default rating at B2-PD, speculative grade liquidity rating at SGL-4, $550 million senior secured asset-based revolver due 2018 at Ba2 (LGD1, 2%) and $1.6 billion senior secured tranche B term loan due December 2014 and $940 million senior secured term loan facility due December 2015 at B1 (LGD3, 39%). The outlook is negative.

The proposed term loans are expected to be used to refinance Federal-Mogul's existing $1.6 billion of debt maturing in December 2014 and $940 million of debt maturing in December 2015. With the completion of the refinancing and extension of the company's debt maturities, Moody's expects the outlook to be revised to stable and the speculative grade liquidity rating to be revised to SGL-3.

The agency said the affirmation of the B2 corporate family rating reflects Federal-Mogul's improving quarterly operating performance trends experienced through 2013 and the company's position as a leading global automotive parts supplier.

The negative outlook reflects Federal-Mogul's weak liquidity profile pending the completion of the refinancing transaction, Moody's said.

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