Moody's introduces new ratings

Moody's Investors Service has introduced two new ratings: probability-of-default ratings and loss-given-default ratings.

The agency's current long-term credit ratings are opinions about expected credit loss that incorporate both the likelihood of default and the expected loss in the event of default. The loss-given-default rating methodology will disaggregate these two key assessments in long-term ratings.

The agency said this methodology will enhance the consistency in its notching practices across industries and will improve the transparency and accuracy of its ratings, as Moody's research shows that credit losses on bank loans have tended to be lower than those for similarly rated bonds.

Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations.

Loss-given-default assessments (or LGDs) are assigned to individual rated debt issues - loans, bonds and preferred stock - and also express Moody's opinion of expected loss as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0%-9%) to LGD6 (loss anticipated to be 90%-100%).

Below is a list of the rating actions for Moody's rated companies, sorted by industry. The rating immediately after the company name denotes the corporate family rating and the percentages next to the LGDs represent the expected loss-given-default rates.

Building products

ACIH, B2; probability-of-default rating, B2; notes, Caa1, LGD6, 90%. Atrium Cos., Inc., loans, upgraded to B1 from B2, LGD3, 37%.

AMH Holdings, Inc., B3; probability-of-default rating, B3; notes, upgraded to Caa2 from Caa3, LGD5, 79%. Associated Materials Inc., loans, upgraded to Ba3 from B3, LGD2, 11%; notes, upgraded to B3 from Caa2, LGD4, 51%.

Axia, Inc., B2; probability-of-default rating, B3; loans, B2, LGD 3, 31%.

Bucyrus International, Inc., Ba3; probability-of-default rating, B1; revolver, upgraded to Ba1 from Ba3, LGD2, 18%.

Brand Services, Inc., B2; probability-of-default rating, B2; senior secured loans, upgraded to Ba3 from B2, LGD2, 28%; guaranteed senior secured loans, provisional B1, LGD3, 45%; notes, Caa1, LGD5, 84%.

Building Materials Corp. of America, B2; probability-of-default rating, B2; notes, downgraded to B3 from B2; LGD4, 70%.

Contech Construction Products, Inc., B1; probability-of-default rating, B1; loans, upgraded to Ba3 from B1, LGD3, 33%.

CPG International I Inc., B2; probability-of-default rating, B2; notes, downgraded to B3 from B2, LGD 4, 58%.

Formica Corp., B2; probability-of-default rating, B2; loans, upgraded to B1 from B2, LGD3, 42%.

Headwaters Inc., B1; probability-of-default rating, B1; loans, Ba3, LGD3, 35%.

IPS Corp., B2; probability-of-default rating, B2; loans, upgraded to Ba2 from B1, LGD2, 22%; notes, Caa1, LGD5, 77%.

Jacuzzi Brands, Inc., B2; probability-of-default rating, B2; notes, B2, LGD3, 50%.

Latham Manufacturing Corp., B2; probability-of-default rating, B2; loans, upgraded to B1 from B2, LGD3, 38%.

Longyear Holdings, Inc., B2; probability-of-default rating, B2; first-lien loans, downgraded to B1 from B2, LGD3, 43%; second-lien loan, Caa1, LGD5, 89%.

Masonite Corp., B2; probability-of-default rating, B2; loans, upgraded to Ba3 from B3, LGD3, 32%.

NCI Building Systems, Inc., Ba2; probability-of-default rating, Ba2; loans, upgraded to Ba1 from Ba2, LGD 3, 32%.

Norcraft Holding Cos. LP, B1; probability-of-default rating, B1; notes, upgraded to B3 from Caa1, LGD5, 87%. Norcraft Cos. LP, notes, upgraded to B1 from B3, LGD3, 45%; revolver, upgraded to Ba1 from B1, LGD1, 7%.

NTK Holdings, Inc., B2; probability-of-default rating, B2; notes, upgraded to Caa1 from Caa2, LGD6, 91%. Nortek, Inc., loans, upgraded to Ba2 from B2, LGD2, 18%; notes, upgraded to B3 from Caa1, LGD4, 68%.

Panolam Industries International, Inc., B2; probability-of-default rating, B2; loans, upgraded to Ba3 from B2, LGD2, 30%; notes, Caa1, LGD5, 84%.

Ply-Gem Industries, Inc., B1; probability-of-default rating, B1; loans, upgraded to Ba2 from B1, LGD2, 27%; notes, B3, LGD5, 80%.

Quality Home Brands Holding, LLC, B2; probability-of-default rating, B2; first-lien loans, upgraded to Ba3 from B2, LGD3, 32%; second-lien loan, Caa1, LGD5, 81%.

Ready Mixed Concrete Co., B2; probability-of-default rating, B2; notes, upgraded to B2 from Caa1, LGD4, 52%.

Schuff International, Inc., B3; probability-of-default rating, B3; notes, downgraded to Caa2 from B3, LGD5, 89%.

St. Marys Cement Inc., Ba3; probability-of-default rating, B1; medium-term loans, upgraded to Ba2 from B1, LGD2, 25%; senior secured loans, upgraded to Ba2 from Ba3, LGD2, 29%.

TCO Funding Corp., B2; probability-of-default rating, B2; loans, upgraded to Ba3 from B2, LGD2, 29%.

Texas Industries, Inc., Ba3; probability-of-default rating: Ba3, bank facility, upgraded to Baa3 from Ba2, LGD2, 10%; notes, Ba3, LGD3, 49%. TXI Capital Trust I, convertible debentures, B2, LGD5, 88%.

U.S. Concrete, Inc., B1; probability-of-default rating, B1; notes, upgraded to B3 from B3, LGD4, 68%.

Walter Industries, Inc., Ba3; probability-of-default rating, Ba3; loans, upgraded to Ba2 from LGD3, 30%; convertible notes, B2, LGD5, 82%.

WII Components, Inc., B1; probability-of-default rating, B1; notes, B2, LGD4, 65%.

Wire Rope Corp. of America, Inc., B2; probability-of-default rating, B2; loan, B2, LGD4, 56%.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.