Moody's ups Terex loans to Baa2, notes to Ba1

Moody's Investors Service said it affirmed Terex Corp.'s corporate family and probability-of-default ratings at Ba2 and upgraded its $896 million senior secured bank credit facility to Baa2 (LGD1, 9%) from Baa3 (LGD2, 16%) and $300 million senior subordinated notes due 2014 to Ba1 (LGD3, 35%) from Ba2 (LGD3, 42%).

The senior subordinated notes due 2017 are affirmed at Ba3 (LGD5, 76% from 79%). The speculative grade liquidity remains SGL-1.

The outlook is stable.

Terex's Ba2 corporate family rating reflects the company's strength in its cranes and mining businesses and global footprint, the agency said.

Through the 12 months ended September, debt-to-EBITDA ratio is 2.1x.

These strengths are balanced against the expectation for a downturn in the company's aerial work platform, construction and materials processing businesses, the agency said.

Concerns include the slowing of the U.S. and Western European economies and the potential that Terex could pursue debt-financed share repurchases and acquisitions once the credit markets have stabilized, the agency said.

Other risks include potential costs associated with any resolution of the Securities and Exchange Commission investigation relating to prior accounting issues and the U.S. Department of Justice investigation related to pricing practices, Moody's noted.

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