Moody's may lift GenCorp

Moody's Investors Service said it has placed the ratings of GenCorp, Inc., including the B3 corporate family rating, on review for possible upgrade following the announcement of the launch of a $125 million convertible subordinated note issue.

Proceeds from the note issue will be used to repay the 4% convertible subordinated notes due 2024 that are putable on Jan. 16, the agency said, adding that any proceeds available from the new issue net of amounts put and fees and expenses, including monies raised through the possible exercise of a 15% greenshoe, will be applied towards the 9.5% senior subordinated notes due August 2013.

Successful issuance of the new notes will address a capital structure weakness that has pressured GenCorp's corporate family and probability of default ratings, the agency added.

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