Moody's confirms UCI

Moody's Investors Service said it confirmed UCI Holdco, Inc.'s corporate family and probability-of-default ratings at Caa1 and its unguaranteed senior unsecured notes at Caa3 (LGD5, 86%) as well as United Components, Inc.'s $190 million guaranteed senior secured bank term loan due 2012 at B1 (LGD1, 9%), and its $230 million guaranteed senior subordinated unsecured notes due 2013 at Caa2 (LGD4, 58%).

This completes the review that began on March 30, and the outlook is negative.

The agency said the confirmed ratings reflect the company's weak credit metrics and increased reliance on receivables factoring to support its liquidity following expiration of its committed bank revolving credit facility. For the last 12 months ended June 30, the debt-to-EBITDA ratio was about 9.2 times using Moody's standard adjustments.

The negative outlook reflects Moody's view that despite the supportive general fundamentals of the automotive aftermarket, the company's top-line growth will continue to be pressured by shifts in consumer spending patterns as a result of an uncertain economy.

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