Moody's confirms Wolverine Tube

Moody's Investors Service said it confirmed Wolverine Tube's Caa2 corporate family rating, Caa2 probability of default rating and Caa3 senior unsecured rating (LGD4, 63%).

According to the agency, the outlook was revised to negative from ratings under review and this action concludes the review on Wolverine's ratings originated on Aug. 30, when the ratings were placed under review for a possible upgrade, which was prompted by the announcement of the rights offering for up to $51 million, from which, together with the exercised option value, the company could have received a maximum of $83 million in cash proceeds.

The agency noted that Wolverine's current ratings are reflective of the company's still constrained liquidity profile due to near-term debt maturities, cost and working capital pressures on the raw materials side, particularly associated with copper price escalation, cash charges resulting from the discontinuation of the U.S. plumbing tube business and closure of two facilities in Alabama and Mississippi, as well as an overall weak operational profile and prolonged margin compression.

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