Moody's rates Altra notes B1

Moody's Investors Service said it assigned B1 corporate family and probability-of-default ratings and an SGL-2 speculative-grade liquidity rating to Altra Holdings, Inc., parent company of Altra Industrial Motion Inc., and a B1 (LGD4, 57%) rating to Altra Holdings' proposed $200 million second-lien senior secured notes due December 2016.

The outlook was changed to stable from negative.

Proceeds from the notes are anticipated to be used, in combination with existing cash balances, to redeem the outstanding senior secured notes of Altra Industrial Motion.

The change in outlook reflects Moody's view that end-market demand appears to have stabilized in recent months as customer inventory de-stocking moderates and order volumes begin to show modest signs of growth. The agency said that Altra's performance in 2009, despite meaningful sales and earnings declines, has benefited from its conservative fiscal policies and balance sheet management as strong cash generation has been applied to debt reduction and aggressive cost-cutting initiatives begin to benefit operating leverage.

Altra's B1 corporate family rating reflects the company's solid cash generation, low leverage and good liquidity profile as well as its modest size, the cyclical nature of its operations and its sales concentration in North America, Moody's said.

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