Moody’s rates Griffon loan Ba2

Moody’s Investors Service said it gave a Ba2 rating to Griffon Corp.’s senior secured credit facilities, comprised of a $400 million senior secured first-lien revolver due 2025 and a planned $750 million senior secured first-lien term loan due 2029. Concurrently, the agency downgraded the company's $1 billion of senior unsecured notes due 2028 to B3 from B2. Moody’s also affirmed Griffon’s B1 ratings and the SGL-2 speculative grade liquidity remains unchanged.

The Ba2 rating on the company's first-lien credit facilities reflects their effective priority relative to the company's unsecured notes. The first-lien credit facilities are secured by a first-priority interest in substantially all the domestic assets of the company and guarantors. The notes’ downgrade reflects changes in the capital structure following the issuance of the term loan. “The much higher mix of secured debt weakens recovery prospects for the unsecured notes in the event of a default,” Moody’s said in a press release.

Term loan proceeds, balance sheet cash and revolver borrowings will be used to fund Griffon's planned $845 million acquisition of Hunter Fan Co., and to pay related fees and expenses. Griffon expects to close the transaction in early 2022. Moody's will withdraw Hunter Fan’s ratings, including the B2 corporate family rating, once the transaction closes and the repayment of Hunter Fan's debt obligations.

The outlook remains stable.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.