Moody's ups Blount

Moody's Investors Service said it upgraded the ratings of Blount Inc. and rated its new debt securities, contingent upon the completion of its proposed financing transactions including a new credit facility, the issuance of $175 million new senior subordinated notes, as well as a concurrent $125 million equity offering by its parent company, Blount International Inc.

Meanwhile, the outlook has been changed to positive.

Specifically, Moody's upgraded the senior implied rating to B2 from B3, the issuer rating to B3 from Caa1. Moody's also assigned a B2 rating to Blount's $125 million senior secured revolver due 2009, $240 million senior secured term loan B due 2010, and $5.2 million Canadian term loan B due 2010, a B3 rating to the $50 million second collateralized institutional loan due 2011, and a Caa1 rating to the $175 million senior subordinated notes due 2014.

Moody's said the rating upgrade and assignment reflect Blount's reduced financial leverage due to the proposed $125 million equity offering. The rating action also considers the company's improving performance in recent years, significant restructuring efforts, and its leading market position in providing equipment, accessories, and replacement parts to the global forestry industry.

On the other hand, the ratings are constrained by the company's still significant debt level, strong cyclicality in its heavy equipment business, underperforming lawnmower division, and relatively high customer concentration risks.

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