Moody's cuts TransDigm view to negative

Moody's Investors Service said it affirmed the ratings of TransDigm, Inc. and has changed the outlook to negative from stable.

Ratings affirmed include senior secured bank revolving credit facility at B1, secured bank term loan B facility at B1, senior subordinated notes at B3 and corporate family rating at B1.

This action was prompted by TransDigm's recent announcement of an issuance of $200 million of notes by its parent, TD Holding Corp., to be used to fund the majority of a $300 million distribution to shareholders.

Despite the higher financial leverage and reduced coverage metrics of the overall TransDigm organization that will result from the transaction, Moody's said its affirmation of the company's ratings considers the potential for continued favorable operating trends to facilitate rapid reduction of debt and a restoration of financial metrics.

The negative outlook recognizes that with a higher level of financial risk, TransDigm is less well positioned to withstand any potential downturn in demand in the aerospace sector that the company serves, Moody's said.

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