Moody's revises Belden to negative, rates notes Ba2

Moody's Investors Service said it affirmed Belden, Inc.'s Ba1 corporate family rating and Ba1-PD probability of default rating, assigned a Ba2 (LGD4, 67%) rating to the proposed $200 million senior subordinated notes due 2024 and revised the outlook to negative from stable.

The proceeds of the new notes will be used for capital expenditures, additional strategic acquisitions and share buybacks.

The agency said the change in outlook to negative reflects the increase in leverage as a result of the new debt and the potential that leverage will remain at elevated levels, particularly if Belden continues to raise debt to fund acquisitions. As a result of the proposed financing, leverage will be about 5 times pro forma for the new debt and the Grass Valley acquisition, a level that Moody’s said it well above Ba1 peers.

The Ba1 corporate family rating continues to reflect Belden's leading positions within segments of the enterprise, broadcast and industrial cabling, connectivity and networking product markets, which can produce solid operating margins and good free cash flow, Moody’s said.

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