Moody's rates RBS loans Ba2

Moody's Investors Service said it assigned a Ba2 (LGD2, 17%) rating to RBS Global, Inc.'s new $265 million senior secured revolving credit facility due 2017 and $788 million senior secured term loan due 2018. RBS is a subsidiary of Rexnord Corp.

The agency also affirmed RBS Global's corporate family rating at B2, probability of default rating at B2-PD, speculative grade liquidity rating at SGL-1 and senior bonds due 2016 and 2018 at B3 (LGD5, 73%, revised from 75%). The outlook is stable

The B2 corporate family rating reflects RBS Global's high financial leverage and economic uncertainties in Europe, the agency said. The company's water management segment is heavily influenced by commercial construction and expenditures by municipalities, which are all expected to remain weak in the near term, Moody's noted.

The agency said the ratings are supported by the company's proven ability to generate positive free cash flow, very good liquidity and expectation for additional deleveraging due to the anticipated performance for its process and motion control segment.

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