Moody's: Masonite notes B3

Moody's Investors Service said it assigned a B2 corporate family and probability of default ratings to Masonite International Corp., a wholly owned subsidiary of Masonite Inc.

These are first-time ratings since the company's emergence from Chapter 11 proceedings, Moody's said.

The agency also said it assigned a B3 (LGD 4, 66%) rating to the proposed $250 million of senior unsecured notes due 2021.

The proceeds will be used to return up to $125 million of capital to existing shareholders with the balance used for general corporate purposes, including financing potential acquisitions and to pay related fees and expenses.

The outlook is stable.

The ratings reflect the company's increased leverage level following the issuance of the proposed notes, the agency said.

The ratings also incorporate a view that management is pursuing a relatively aggressive financial policy by distributing the dividend, which reduces financial flexibility at a time when liquidity preservation is paramount, Moody's said.

The ratings are supported by a view that Masonite is well positioned to economically benefit when its end markets return to more normalized levels, the agency said.

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