Moody's cuts Hayes Lemmerz, rates notes B2

Moody's Investors Service said it assigned a B2 rating to the new €120 million guaranteed senior unsecured notes maturing 2012 of HLI Operating Co. Inc., an indirect subsidiary of Hayes Lemmerz International Inc.

Half of the net proceeds of the proposed notes will be applied to prepay existing senior secured term loans, with the other half to be used to either augment cash or repay outstanding revolver debt or accounts receivable securitization usage.

Moody's additionally downgraded all the existing ratings for HLI Operating Co. in response to Hayes Lemmerz's weaker-than-anticipated consolidated free cash flow performance since its June 2003 reorganization out of Chapter 11 bankruptcy. Moody's said Hayes Lemmerz will likely once again realize negative free cash flow generation during the fiscal year ending Jan. 31, 2006 and will therefore have to rely on either its balance sheet cash or liquidity facilities in order to finance a portion of its cash interest obligations during this period.

More specifically, Moody's downgraded HLI Operating Co.'s $162.5 million remaining balance of 10.5% guaranteed senior unsecured notes maturing June 2010 (the original issue amount of $250 million was reduced as a result of an equity clawback executed in conjunction with Hayes Lemmerz's February 2004 initial public equity offering) to B2 from B1; the approximately $527 million of remaining guaranteed senior secured bank credit facilities to B1 from Ba3; the senior implied rating to B1 from Ba3; and the senior unsecured issuer rating to B3 from B1.

The outlook for HLI Operating Co. is stable.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.