Moody's rates HC2 notes Caa1

Moody's Investors Service said it affirmed HC2 Holdings, Inc.'s B3 corporate family rating, B3-PD probability of default rating and SGL-3 speculative grade liquidity rating.

The agency also said it assigned a Caa1 rating to the company's proposed $535 million senior secured notes.

The outlook remains stable.

The proceeds will be used to redeem the company's existing $510 million senior secured notes and pay accrued interest and transaction fees, Moody's said.

The Caa1 rating on the existing senior secured notes will be withdrawn when they are redeemed.

Moody's said the company's credit metrics remain weak for its B3 corporate family rating based on the expected near term dividends and tax sharing payments from its operating subsidiaries.

But, the ratings are supported by the cash generating potential of its subsidiaries in relation to its holding company cash obligations, as well as the collateral value of the assets in relation to the principal amount of its outstanding senior secured notes, the agency added.

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