Moody's cuts Crane Holdings

Moody's Investors Service said it downgraded Crane Holdings, Co.'s senior unsecured notes maturing in 2048 to Ba2 from Baa2. The agency also lowered the company's senior notes maturing in 2036, which will become secured, to Baa3 from Baa2.

Concurrently, Moody's assigned Crane Holdings a Ba1 corporate family rating, a Ba1-PD probability of default rating, an SGL-1 n rating, and a Baa3 rating to the company's planned credit facilities, including the term loan and the revolver. The Baa2 senior unsecured notes maturing in December will be withdrawn at the planned redemption of the notes, shortly after the spinoff is completed. The outlook is stable.

The rating actions conclude the review for downgrade started on March 31, 2022, Moody’s said. It started the review after the company reported it planned to separate into two independent publicly traded companies via a tax-free distribution of the aerospace & electronics and process flow technologies businesses to the company's shareholders. Post-spinoff, Crane Holdings will consist of the payment & merchandising technologies business. The spinoff and the separation of the company are planned for Monday. The company also plans to change its name from Crane Holding, Co. to Crane NXT, Co. on the same day as it completes the spinoff.

"The downgrade reflects Crane Holdings' smaller scale and less business diversification after it spins off a substantial part of its business, including the process flow technologies, aerospace & electronics, and engineered materials segments, as Crane Co.," said Motoki Yanase, a Moody’s vice president and senior credit officer, in a press release.

"Crane Holdings will also take on a secured term loan to refinance some of its unsecured debt and its 2036 notes will become secured notes as part of the separation process. Having secured debt represent a significant portion of the company's debt is indicative of a speculative-grade capital structure," added Yanase.

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