Moody's rates Superior Essex notes

Moody's Investors Service said it has assigned Superior Essex Communications LLC and Essex Group Inc.'s (both co-borrowers) proposed $275 million senior unsecured guaranteed notes due 2012 a B3 rating.

Proceeds from the notes will be used to acquire certain common cable related assets of Belden for $95 million and to refinance existing debt.

Moody's also confirmed the company's $150 million senior secured revolver due Nov. 10, 2007 at B1 and senior implied rating of B2.

The outlook remains stable.

Moody's said the ratings consider the increased debt related to this transaction as well as the benefits that are expected to be derived from the purchase of these assets. The ratings also consider the company's improved post bankruptcy balance sheet, an improvement in demand for its products, and an enhanced cost structure.

Moody's noted the ratings consider weak, but improving, demand for its communications related products, low utilization rates, competitive business climate, and high fixed costs. Belden has been reporting operating losses, and there is no guarantee that the assets purchased by Superior Essex will provide the anticipated returns.

The ratings benefit from expectations that the company is well positioned to benefit from an improvement in demand in the telecommunications sector.

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