Moody's assigns Signal Parent B2

Moody's Investors Service said it gave a B2 corporate family rating and a B2-PD probability of default rating to Signal Parent, Inc. (Interior Logic Group (ILG)).

"The assignment of B2 corporate family rating reflects our expectation that within the next 12 months ILG will reduce debt to EBITDA to below 6x and improve interest coverage toward 3x," said Natalia Gluschuk, a Moody's vice president and senior analyst, in a press release. "ILG will benefit from favorable trends in the home building market and cost-cutting initiatives that will contribute to topline and operating margin growth."

Moody's also assigned a B1 rating to ILG's proposed $550 million first-lien term loan due 2028 and a Caa1 rating to the proposed $300 million senior unsecured notes due 2029.

The loan’s B1 rating, one notch above the CFR, reflects the support provided by the proposed senior unsecured notes in the capital structure. The Caa1 rating on notes reflects their junior position concerning a $100 million asset-based lending revolving credit facility due 2026 and the term loan and the expectation of loss absorption in a default scenario, the agency said.

The Blackstone Group will use the proceeds and $734 million of equity to acquire ILG from Littlejohn and Platinum Equity.

The outlook is stable.

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