Moody’s rates Anixter notes Ba3

Moody's Investors Service said it upgraded Anixter, Inc.'s speculative grade liquidity rating to SGL-2 from SGL-3 and changed the outlook to stable from negative, in conjunction with Anixter International, Inc., Anixter's parent holding company announcing a $400 million notes offering.

At the same time, the agency assigned a Ba3 rating to the proposed $400 million senior unsecured notes due 2021.

The Ba2 corporate family and Ba2-PD probability of default ratings were affirmed.

Proceeds will be used to reduce borrowings under the company's credit facilities, creating more than sufficient availability to repay the notes due March 1, 2015 and removing a significant rating constraint for the company.

Moody’s said the Ba3 notes rating results from its expectations that these notes are pari passu to the $200 million senior unsecured notes due 2015 and $350 million senior unsecured notes due 2019, and share the same guarantors. The agency views these notes as structurally subordinated to Anixter's unsecured revolving credit facility and term loan (both unrated), because the bank debt will benefit from the eventual guarantee provided by Tri-Northern Acquisitions Holdings, Inc., Anixter's recently acquired business, and the notes will not be guaranteed by Tri-Northern.

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