Moody's upgrades Eco-Bat to Ba3

Moody's Investors Service said it upgraded Eco-Bat Technologies Ltd.'s corporate family rating to Ba3 from B1, assigned a Ba3 probability-of-default rating to the company, affirmed Eco-Bat Finance plc's €235 million 10 1/8% senior notes due 2013 at B1 and assigned an LGD4 (65%) loss-given-default assessment to the notes.

The outlook was changed to stable from positive.

The rating actions follow a review of the company's underlying positive operational performance trends and takes into account the proposed €600 million senior pay-in-kind notes issued at EB Holdings, which owns 86.5% of Eco-Bat Technologies Ltd. The proceeds of the new notes will be used to refinance EB Holdings' existing PIK notes, to pay a dividend to the company's shareholder and to pay fees and expenses.

The agency said the upgrade to Eco-Bat's corporate family rating was driven by the company's sound credit metrics, with stronger performance largely driven by cyclically high lead prices combined with the retention of substantial free cash flow during this period of strong operational performance, and the expectation that the company will not be distributing this cash through distributions in the future.

The stable outlook reflects Moody's view that the company's ratings will be constrained by continued lead price volatility and cyclicality.

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