Moody's rates Atrium, loan B3

Moody's Investors Service said it assigned B3 corporate family and probability-of-default ratings to Atrium Cos., Inc. and a B3 (LGD3, 44%) rating to its proposed $185 million first-lien term loan due 2016.

The outlook is stable.

The ratings anticipate that the company will emerge from Chapter 11 proceedings in early May.

The agency said the B3 corporate family rating incorporates its view that Atrium's end markets will remain sluggish through the balance of 2010 and into 2011. The company derives about 50% of its revenues from the new home construction market and the balance from the repair and remodeling sector. In addition, Moody's said the company will remain highly leveraged despite shedding approximately 60% of its pre-bankruptcy debt upon emergence from Chapter 11.

The company's improved liquidity profile, with no near-term maturities, gives Atrium some financial flexibility to contend with economic uncertainties, the agency said, and Moody's expects that Atrium's operating margins should benefit from its cost-reduction program.

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