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Moody's rates Hayes Lemmerz loans B2, note Caa2
Moody's Investors Service said it raised to B3 from Caa1 the corporate family and probability-of-default ratings of HLI Operating Co., Inc., a wholly owned subsidiary of Hayes Lemmerz International, Inc.
The agency also assigned B2 (LGD3, 33%) ratings to the new senior secured revolving credit facility and term loan facility to be issued by HLI Operating and the senior secured synthetic letter-of-credit facility to be issued by HLI Luxembourg Sarl and assigned a Caa2 (LDG5, 87%) rating to the new senior unsecured notes to be issued by HLI Luxembourg.
The outlook for these ratings was changed to stable from negative.
The agency also placed the Caa2 (LGD5, 72%) $157 million 10½% senior unsecured notes under review for downgrade. The notes are callable in July and are expected to be repurchased. The review will consider the degree to which covenants and rights are stripped from any notes not purchased.
These rating actions are based upon the company successfully completing a series of transactions that include the closing of an announced $180 million common stock rights offering, the issuance of the new senior secured bank debt and the issuance of the new senior unsecured note. The common stock rights offering will be used to repay the company's existing 10½% notes.
Moody's said the transactions will reduce leverage, improve credit metrics and better align Hayes Lemmerz's debt service requirements with its geographic cash generating capacity.
The ratings reflect the continuing challenges of the automotive supplier industry, the agency added.
For the last 12 months ended Jan. 31, Hayes Lemmerz's total debt-to-EBITDA ratio was about 5.5x.
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