Moody's assigns Schieder Möbel notes B3

Moody's Investors Service said it assigned a provisional B1 corporate family rating to Schieder Möbel Holding GmbH.

The agency said it also assigned a provisional B3 rating to the company's proposed issuance of €145 million senior subordinated notes, which will be mainly used to refinance existing indebtedness.

The corporate family rating reflects the company's leading market positions in the production and distribution of furniture in Central and Eastern Europe, its broad product offering, ranging from case goods, sofas and beds to tables and chairs and Schieder's ability to absorb raw material price volatility through price list adjustments for new product launches and fixed price mechanisms for certain large production items, Moody's said.

However, the ratings also reflect Schieder's exposure to unfavorable macroeconomic conditions, material execution risk and a significant degree of uncertainty associated with the company's expansion strategy to build production capacity in Russia and China as well as its highly leveraged capital structure adjusted for leases, factoring facility and the profit participation certificates even before any drawings under the new revolving credit facilities.

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