Moody's affirms Unifrax

Moody's Investors Service said it affirmed Unifrax I LLC's B2 corporate family rating and Ba3 rating on its senior secured term loan B. The rating on the existing $325 million senior secured term loan B due 2013 and $50 million senior secured revolver due 2013 was affirmed at Ba3 (LGD3, 32% from LGD2, 27%).

The outlook is stable.

The term loan B is being expanded by $150 million to finance the acquisition of Saffil Ltd. in a transaction expected to close in the third quarter 2011.

The affirmation reflects the strong operating results since recovering from the 2008-2009 recession, the positive view of the strategic rationale for the pending acquisitions as well as expectations that the company de-lever, the agency said.

Unifrax's ratings consider high margins, strong market shares, a relatively large customer base, geographic and operational diversity, attractive cost positions as a low cost producer and barriers to entry, the agency said.

The ratings also consider the company's narrow product line, modest size, high leverage and exposure to cyclical industrial end markets, the agency added.

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