Moody's: Armstrong loan B1

Moody's Investors Service said it assigned a B1 (LGD3, 42%) rating to Armstrong World Industries, Inc.'s $550 million senior secured term loan B due 2018.

The agency also said it affirmed its corporate family and probability of default ratings at B1, along with the B1 (LGD 3, 42%) ratings on its $250 million senior secured revolving credit facility due Nov. 23, 2015, $250 million senior secured term loan A due Nov. 23, 2015 and $550 million senior secured term loan B due May 23, 2017. The company's speculative-grade liquidity rating remains at SGL-2.

The proceeds will be used to reduce an equal amount of the company's existing senior secured term loan B due May 23, 2017.

The outlook is stable.

Although the proposed debt issuance will reduce cash interest costs up to $5.5 million per year, it will have minimal impact on the company's credit metrics, but extends the maturity profile, Moody's said.

The ratings reflect its leveraged capital structure following its special cash dividend of about $800 million that occurred in December 2010, the agency said.

But the company's strong North American market position in providing flooring to the new construction and remodeling end markets positions it to benefit from an eventual economic and construction recovery, Moody's added.

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