Moody's affirms ASP HHI

Moody's Investors Service said it affirmed the ratings of ASP HHI Acquisition Co., Inc. following the announcement of its plan to use an incremental term loan to fund a $111.5 million dividend to shareholders. The company has a B2 corporate family rating and a B3-PD probability of default rating, and its $75 million senior secured revolving credit facility due 2017 and upsized $679.5 million (previously $564.5 million) senior secured term loan due 2018 are rated B2 (LGD3, 34%). The outlook is stable.

The agency said the B2 corporate family rating reflects HHI's weakened pro forma credit metrics following the company's second shareholder dividend since being acquired by affiliates of American Securities in October 2012. Moody's estimates that the combined shareholder dividends will return over 85% of the sponsor's equity investment contributed in connection with the 2012 leveraged buyout and that HHI's pro forma leverage is 4.3 times as of the end of 2013.

HHI's stable outlook balances the company's extended period of elevated leverage against its strong market position, success in new business wins and expected positive free cash flow generation over the near term, the agency said.

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