Moody's cuts Hunter Fan to B2, rates Coolbreeze loans B1, Caa1

Moody's Investors Service said it lowered the corporate family rating of Hunter Fan Co. to B2 from B1 and affirmed the probability-of-default rating at B2.

The agency also assigned B2 corporate family and probability-of-default ratings to Coolbreeze Acquisition Corp., the entity being formed to facilitate the acquisition of Hunter Fan, B1 (LGD3, 35%) ratings to its new $145 million first-lien secured term loan, $15 million first-lien secured delayed-draw term loan and $60 million first-lien secured revolving credit facility and a Caa1 (LGD5, 84%) rating to its proposed $75 million second-lien secured term loan.

The outlook is stable.

Proceeds from the $295 million of new credit facilities will be used to fund the acquisition of Hunter Fan by affiliates of MidOcean Partners, which includes refinancing the existing $150 million term loan and $50 million revolving credit facilities (currently rated Ba3).

The downgrade reflects the increased leverage of the company following the proposed acquisition and negative impact on its leverage and interest coverage metrics to levels consistent with a B2 rating, Moody's said.

The ratings also reflect the company's moderate scale in the home furnishing/small appliance market and high customer concentration with major home improvement retail chains, the agency said, although these aspects are partly mitigated by the company's leading market position in the branded ceiling fan industry.

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