Moody's rates ThermaClime

Moody's Investors Service said it has assigned ThermaClime Inc. a B3 rating to the new $90 million second-lien senior secured notes due 2014, a B3 senior implied rating, a Caa2 senior unsecured issuer rating, and a speculative grade liquidity rating of SGL-3.

The outlook is stable.

Moody's does not rate the company's $15 million asset-based revolving credit facility.

Moody's said the ratings reflect ThermaClime's weak credit profile, considerable volatility in its financial and operating performance, and significant exposure to commodity price fluctuations and economic cyclicality. The ratings are further constrained by the company's substantial legal and environmental contingent liabilities, heavy customer concentration at its chemical business, as well as high capex requirements.

On the other hand, the ratings recognize the company's strong position in the hydronic fan coil and water source heat pump segments of the HVAC industry, as well as currently adequate liquidity. The ratings also consider the relatively small amount of senior-ranking debt ahead of the notes.

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