S&P rates Goodman Global loan B+, notes B-

Standard & Poor's said it assigned its B+ corporate credit rating to Goodman Global Holdings Inc. in connection with its proposed leveraged buyout transaction. At the same time, S&P assigned its B+ bank loan rating and its recovery rating of 2 to Goodman's proposed $500 million senior secured credit facilities.

In addition, S&P assigned its B- senior unsecured debt rating to the company's proposed $200 million senior unsecured floating-rate notes due 2012 and its B- subordinated debt rating to Goodman's proposed $450 million senior subordinated notes due 2012.

The allocation of amounts between the senior unsecured and senior subordinated notes is to be determined.

Transaction proceeds, along with about $478 million of equity, will be used to fund the $1.4 billion purchase of Goodman by an Apollo Management LP affiliate and to pay related fees.

S&P said the ratings on Goodman reflect its mature and cyclical markets; established competition that includes larger and better capitalized companies; the relatively narrow focus of its product offerings; earnings vulnerability to weather and rising raw-material and transportation costs; a very aggressive financial profile; and exposure to rising interest rates.

These negatives, S&P said, overshadow the company's good market position as the second-largest U.S. manufacturer of residential and light commercial air conditioning and heating equipment; low-cost manufacturing; and benefits associated with its captive distribution network.

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