Moody's rates Owens Corning loans, notes prospective Baa3

Moody's Investors Service said it assigned a prospective Baa3 rating to Owens Corning's proposed senior unsecured credit facilities and also assigned a prospective Baa3 to the company's proposed senior unsecured notes.

The investment-grade ratings reflect the company's extensive market position in the insulation and composite solutions businesses, franchise value, expectation for low debt leverage at emergence and anticipated significant free cash flow.

The ratings are constrained by the company's lack of post-bankruptcy operating track record, weak covenant protection, low estimated price elasticity and the negative effects from slowing home starts.

The following ratings have been assigned: $1.0 billion senior unsecured revolving credit facility due 2011, rated prospective Baa3; $600 million senior unsecured delayed draw term loan due 2011, rated prospective Baa3; $1.2 billion senior unsecured notes, rated prospective Baa3; and senior unsecured rating, prospective Baa3.

The outlook is stable.

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