Moody's rates Chassix notes B3

Moody's Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to Chassix, Inc. and a B3 (LGD4, 56%) rating to the $325 million senior secured notes to be issued by Chassix. The outlook is stable.

Chassix is a newly formed intermediate holding company that comprises the operations of Diversified Machine Inc. and Concord International, Inc. The existing ratings of Diversified Machine and its parent UC Holdings, Inc. are unaffected by the action including UC Holdings' B3 corporate family rating, B3-PD probability of default rating and the B3 (LGD4, 53%) rating assigned to Diversified Machine's $237 million senior secured term loan facility. These ratings will be withdrawn.

The new notes will be used to refinance existing debt at Diversified Machine and Concord and to provide a small amount of cash on hand.

The agency said Chassix's B3 corporate family rating reflects the company's high leverage and weak operating performance as management continues its efforts to correct underperforming operations and integrate the Concord facilities that were acquired in 2012. Chassix has initiated a number of restructuring and integration initiatives, but Moody's said the full financial benefit of these actions has not been realized in reported results.

Supporting an improvement in Chassix's operating performance over the intermediate term is Moody's expectation of continued growth in North American automotive demand and the realization of further benefits from restructuring actions.

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