Moody's ups Grohe

Moody's Investors Service said it upgraded Grohe Holding GmbH's corporate family rating to B2 from B3 and probability of default rating to B1 from B3.

The agency also said it upgraded to B2 from B3 the rating on Grohe's outstanding senior secured notes, along with the rating on its €335 million senior notes due in October 2014 to B3 from Caa1.

Moody's also said it assigned a provisional B2 rating to Grohe's new €400 million senior secured notes due in 2017/2018.

The outlook is stable.

The upgrade reflects strong operating performance of Grohe supported by the company's successful strategy in its key products and markets, as well as an improved debt maturity profile, Moody's said.

As part of the partial refinancing of the capital structure recently announced, Grohe will issue a new five year €150 million revolving credit facility to replace the existing €150 million revolver maturing in 2012.

Grohe also will issue €400 million of new senior secured notes due in 2017/2018 to refinance €400 million of the existing €800 million senior secured floating-rate notes maturing in 2014.

The floating-rate tranche of the new notes matures in September 2017, six months before the fixed-rate tranche due in March 2018, the agency said.

Against the backdrop of stabilizing but still challenging trading conditions, Grohe has achieved strong growth in sales and EBITDA and substantial de-leveraging from 2009 level, Moody's said.

The company's leverage still remains high at 6.9x as of the end of 2010, the agency added.

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