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 the methodology will also 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 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.

Non-paper packaging

AEP Industries, Ba3; probability-of-default rating: Ba3; notes, B1, LGD4, 69%.

Atlantis Plastics, Inc., B2; probability-of-default rating: B2; revolver and term loan, upgraded to B1 from B2, LGD3, 35%; junior term loan, Caa1, LGD5, 84%.

Ball Corp., Ba1; probability-of-default rating: Ba1; revolvers and term loan, Ba1, LGD4, 52%; notes, upgraded to Ba1 from Ba3, LGD4, 52%.

Berry Plastics Holding Corp., B1; probability-of-default rating: B1; first-lien revolver and term loan, upgraded to Ba1 from Ba2; LGD2, 18%; notes, B2, LGD4, 62%.

BWAY Corp., B1; probability-of-default rating: B1; revolvers and term loans, upgraded to Ba2 from Ba3, LGD2, 28%; notes, B3, LGD5, 86%.

Consolidated Container Co. LLC, B3; probability-of-default rating: B3; revolver and term loan, upgraded to Ba3 from B2, LGD2, 18%; senior secured second-lien discount pay-in-kind notes, B3, LGD4, 53%; senior subordinated notes, Caa2, LGD5, 85%.

Constar International, Inc., B3; probability-of-default rating: B3; senior secured notes, upgraded to B2 from B3, LGD3, 33%; senior subordinated notes, Caa2, LGD5, 88%.

Covalence Specialty Materials Corp., B1; probability-of-default rating: B1; term loan, Ba3, LGD3, 34%; second-lien term loan, B2, LGD4, 62%; notes, B3, LGD5, 86%.

Crown Cork and Seal Co., Inc., Ba3; probability-of-default rating: Ba3; notes, B2, LGD6, 92%. Crown Americas LLC, revolver an term loan, upgraded to Baa3 from Ba2, LGD2, 15%; notes, B1, LGD4, 62%. European Holdings, revolver, term loan and notes, upgraded to Baa3 from Ba2, LGD2, 15%. Crown Canada, revolver, upgraded to Baa3 from Ba2, LGD2, 15%. Crown Cork plc, notes, B2, LGD6, 92%.

Graham Packaging, LP, B2; probability-of-default rating: B2; first-lien revolver and term loan, upgraded to B1 from B2, LGD3, 32%; second-lien term loan, B3, LGD5, 74%; senior unsecured notes, Caa1, LGD5, 83%; senior subordinated notes, upgraded to Caa1 from Caa2, LGD6, 92%.

National Wine & Spirits, Inc., B2; probability-of-default rating: B2; notes, B3, LDG4, 64%.

Owens-Illinois, Inc., B2; probability-of-default rating: B2; revolver, term loans and senior secured notes, upgraded to Ba2 from B1, LGD2, 22%; 8¼% and 6¾% senior unsecured notes, downgraded to B3 from B2, LGD4, 67%; 7½%, 7.35%, 7.8% and 8.1% senior unsecured notes, downgraded to Caa1 from B3, LGD5, 89%.

Plastipak Holdings, Inc., B2; probability-of-default rating: B2; notes, downgraded to B3 from B2, LGD5, 77%.

Portola Packaging, Inc., Caa1; probability-of-default rating: Caa1; revolver, upgraded to B1 from B3, LGD1, 9%; notes, downgraded to Caa2 from Caa1, LGD4, 64%.

Pregis Corp., B2; probability-of-default rating: B2; revolver and term loan, upgraded to Ba2 from B1, LGD2, 16%; senior secured second-lien notes, upgraded to B2 from B3, LGD4, 51%; senior subordinated notes, Caa1, LGD5, 83%.

Silgan Holdings Inc., Ba2; probability-of-default rating: Ba2; revolver and term loans, Ba2, LGD3, 41%; notes, B1, LGD6, 93%.

Solo Cup Co., B3; probability-of-default rating: B3; first-lien revolver and term loan, B2, LGD3, 34%; second-lien term loan, Caa1, LGD5, 70%; senior subordinated notes, Caa2, LGD5, 87%.

Tekni-Plex, Inc., Caa1; probability-of-default rating: Caa1; 10.87% senior secured notes, upgraded to B1 from B3, LGD2, 15%; 8 ¾% senior secured notes, upgraded to Caa1 from Caa2, LGD3, 45%; 12¾% senior subordinated notes, upgraded to Caa3 from Ca, LGD5, 85%.

Terphane Holding Corp., B2; probability-of-default rating: B3; notes, B3, LGD5, 74%.

Viskase Cos., Inc., B2; probability-of-default rating: B2; notes, upgraded to B1 from B2, LGD3, 32%.

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