Moody's rates Actuant notes Ba2

Moody's Investors Service said it assigned a Ba2 (LGD3, 43%) rating to Actuant Corp.'s $250 million senior unsecured notes due 2017 and affirmed the company's Ba2 corporate family rating and Ba2 probability-of-default rating. The agency also affirmed the company's $400 million senior secured bank credit facility due 2009 at Ba2 (LGD3, 43%).

The outlook was changed to positive from stable. The outlook change reflects the company's strong operations, with good cash flows and solid debt coverage metrics, and the agency's belief that the company will improve its debt protection measures over the next 12 months to 18 months. It expects the company to make modest-sized acquisitions that it can successfully integrate into core operations, which can help further diversify revenue streams.

The corporate family rating reflects the company's market position and its ability to integrate acquisitions without disrupting its core business, Moody's said.

The rating is constrained by the cyclical nature of the company's industrial end markets, Moody's said. But the company should be able to weather downturns better than in the past because of broader product offerings, end market diversity and liquidity commitment.

The company's debt-to-EBITDA ratio is 3.5 times.

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