Moody's upgrades Goodman Global

Moody's Investors Service said it upgraded Goodman Global Holdings Inc.'s corporate family rating to B1 from B2, $175 million senior secured revolving credit facility due 2010 to B1 from B2, $350 million (original amount) senior secured term loan B due 2011 to B1 from B2, $250 million senior unsecured floating-rate notes due 2012 to B2 from B3 and $400 million senior subordinated notes due 2012 to B3 from Caa1. The outlook is stable.

The upgrade reflects the strong earnings growth and resulting de-leveraging that Goodman Global has accomplished since the end of fiscal 2004, the agency said. It also credits the company for its ability to successfully offset significant price increases in several of its key raw materials as evidenced by the improvement in adjusted gross margin over the past year to 23.2% in third quarter of 2005 from 22.6% at the end of 2004.

Moody's said the ratings are constrained, in part, by the working capital investment necessary to support the company's business model and its expected growth and by its exposure to new home construction.

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