Moody's: Eagle Spinco loan Ba1

Moody's Investors Service said it assigned a Ba1 rating (LGD 2, 26%) to Eagle Spinco's $200 million secured term loan due 2017.

Eagle Spinco is a wholly-owned subsidiary of Axiall Corp., formerly known as Georgia Gulf Corp.

The term loan was initially $279 million and was funded by a bank group led by Barclays Bank Plc in January 2013 to finance a portion of Georgia Gulf's merger with a business of PPG Industries.

Axiall recently drew on its revolver to pay down $79 million of the term loan, Moody's said, and the remaining $200 million is now being syndicated to investors.

Moody's also affirmed Axiall's corporate family rating at Ba2, probability of default rating at Ba2-PD, speculative-grade liquidity rating at SGL-1 and the Ba3 rating (LGD 5. 70%) on its $450 senior unsecured notes due 2023.

The rating on Eagle Spinco's $688 million unsecured notes due 2021 also was affirmed at Ba3 (LGD 5, 70%).

The outlook is stable.

The agency said it expects Axiall to repay this loan well before the maturity date as the company had more than $200 million of cash as of Dec. 31 and is expected to generate more than $100 million of free cash flow in 2013.

The ratings reflect the company's position as one of the largest producers of chor alkali in North America after the merger with PPG's chlor alkali business, Moody's said.

The ratings also consider its conservative financial policies, improvement in the company's vertical back integration and an expectation that Gulf Coast natural gas costs will provide a sustainable competitive advantage for exports, the agency said.

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