Moody's affirms Armstrong

Moody's Investors Service said it affirmed Armstrong World Industries, Inc.'s B1 corporate family and probability default ratings.

The agency also said it affirmed its $250 million senior secured revolving credit facility due 2015 at B1 (LGD 3, 42%), $250 million senior secured term loan A due 2015 at B1 (LGD 3, 42%) and $800 million senior secured term loan B due 2018 affirmed at B1 (LGD 3, 42%).

Armstrong is proposing a $250 million add-on to term loan B maturing March 2018.

The proceeds will be used to pay a special cash dividend to Armstrong's shareholders.

The outlook is stable.

The company's speculative grade liquidity assessment remains SGL-2.

The ratings reflect its highly leveraged capital structure as the result of its aggressive financial strategy, the agency said.

The proposed $500 million dividend follows a previous dividend totaling about $800 million paid in December 2010.

These two dividends represent almost 20 years of Armstrong's 2011 reported GAAP free cash flows, Moody's said.

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