Moody's rates General Cable convertibles B1, ups notes to B1

Moody's Investors Service said it assigned a B1 rating to the proposed $315 million senior unsecured convertible notes due 2013 (LGD4, 65%) of General Cable Corp. The agency also upgraded the company's corporate family and probability-of-default ratings to Ba3 from B1 and $285 million senior unsecured notes due 2010 to B1 (LGD4, 65%) from B2.

The outlook is stable.

The proceeds of the senior convertible notes will be used to reduce revolver borrowing outstanding and for general corporate purposes, including acquisitions.

The agency said the ratings and upgrade primarily reflect the company's moderate leverage, strengthening interest coverage, low-cost operations, leading market position in the wire and cable industry and highly diversified end markets and customer base. The ratings are additionally supported by strong capacity utilization, rationalized industry-wide supply, positive demand dynamics in the energy segment of the company's business, a substantial inventory valuation cushion, low bad debt expense and sizeable net operating loss carry forwards.

Factors weighing on the company's ratings include the large commodity price content of the firm's operations, the highly seasonal and cyclical nature of its business, the concentration of key raw material supply, a significantly under-funded defined-benefit pension plan and the unionization of a material portion of the company's workforce, Moody's said.

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