Moody's rates United Subcontractor loans B2, Caa1

Moody's Investors Service said it affirmed United Subcontractor Inc.'s B2 corporate family rating, assigned a B2 rating to the company's new credit facility - which includes a $300 million first-lien term loan B due 2013, $35 million revolving credit facility due 2011 and $15 million synthetic letter-of-credit facility due 2013 - and assigned a Caa1 rating to the company's $200 million second-lien term loan due 2014 in conjunction with a $125 million dividend recapitalization.

The outlook is stable.

The agency said the ratings balance the expectation that the company's financial metrics will deteriorate given the $125 million dividend distribution and the weakened outlook for new homebuilding construction against the cushion in the current rating given the many financial metrics that are strong for the B2 rating category. The ratings also benefit from the company's variable cost structure because this, in Moody's view, suggests that the company should be able to cut costs as business slows.

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