Moody's rates Griffon notes B1

Moody's Investors Service said it affirmed Griffon Corp.'s B1 corporate family rating and B1-PD probability of default rating and assigned a B1 rating to the company's newly proposed $550 million senior unsecured notes offering.

At the same time, the agency affirmed the company's SGL-2 speculative grade liquidity rating.

The outlook remains stable.

Proceeds from the $550 million proposed notes offering and about $38 million of balance sheet cash will be used to refinance $550 million of existing senior unsecured notes due 2018, pay a tender premium of nearly $30 million and fund transaction fees and expenses.

While the transaction is effectively leverage neutral and is expected to improve the company's cost of capital, Moody's said it also marginally weakens near-term liquidity because of the use of balance sheet cash. However, the company maintains a $225 million revolving credit facility that had roughly $180 million of availability (subject to financial covenant limitations) at Dec. 31, which continues to provide the company with good liquidity.

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