Moody's rates Goodman loans Ba3

Moody's Investors Service said it assigned a Ba3 rating (LGD3, 41%) to Goodman Global Inc.'s proposed $250 million first-lien revolving credit facility and $1.4 billion first-lien term loan B, and a B3 rating (LGD6, 90%) to the company's proposed $375 million second-lien term loan.

The company's B1 corporate family and probability-of-default ratings have been affirmed.

The outlook remains negative.

Goodman's B1 corporate family rating reflects the company's competitive market position, established distribution and dealer network for HVAC systems, and strengthened credit metrics, according to the agency.

Proceeds from the refinancing, along with cash on hand, will be used to fund a $366 million dividend to shareholders. Although the proposed transaction increases the company's leverage to about 5 times, Goodman has a track record of generating positive cash flow to service the debt, the agency said.

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