17.09.2012 22:04
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General Cable Corporation -- Moody's assigns B1 rating to General Cable's proposed senior unsecured notes; upgrades liquidity rating; revises outlook to stable

Approximately $1.1 billion of rated debt affected

New York, September 17, 2012 -- Moody's Investors Service assigned a B1 rating to General Cable Corporation's ("General Cable") proposed Senior Unsecured Notes due 2022, the proceeds of which will be used to retire the existing Senior Convertible Notes due 2013 and Senior Unsecured Notes due 2017. The proposed notes will rank pari passu to the company's existing Notes due 2015. In a related rating action, General Cable's speculative-grade liquidity rating was also upgraded to SGL-1 from SGL-3. In addition, Moody's affirmed the Ba3 corporate family and probability of default ratings. The rating outlook is stable.

The following ratings/assessments were affected by this action:

Corporate Family Rating affirmed at Ba3;

Probability of Default Rating affirmed at Ba3;

1.00% Sr. Unsec. Conv. Notes due 2012 affirmed at B1 (LGD5, 71%);

Floating Rate Sr. Unsec. Notes due 2015 affirmed at B1 (LGD5, 71%);

Senior Unsecured Notes due 2022 rated B1 (LGD5, 71%);

4.5% Sr. Sub. Conv. Notes due 2029 affirmed at B2 (LGD6, 93%); and,

The speculative grade liquidity rating upgraded to SGL-1 from SGL-3.

RATINGS RATIONALE

General Cable's Ba3 Corporate Family Rating incorporates our view that the company's business profile is a credit strength. The company's large size and strong geographic diversification position it well among its peers. The debt-financed acquisitions of Alcan Cable (former wire/cable business of Rio Tinto plc) and a 60% interest in Procables, S.A. will improve its ability to compete in a very fragmented industry that offers few opportunities for product differentiation. As a global manufacturer, slowdowns in any specific geographic region may be offset by strength in others. General Cable derives slightly more than 60% of its revenues from outside of the US. However, the company's key credit metrics are currently weak for the rating. For the 12 months ended June 29, 2012, the General Cable had adjusted debt-to-EBITDA of 5.0 times, adjusted EBITA interest coverage of 1.9 times and adjusted free cash flow-to-debt of 2.9%. We expect some improvement in these credit metrics as the company improves its operations and integrates its acquisitions.

The upgrade of General Cable's speculative-grade liquidity rating to SGL-1 from SGL-3 reflects the strengthening of the company's liquidity profile following the proposed refinancing of $550 million of long-term debt with the new Notes due 2022. Further supporting the upgrade is the extension of the revolving credit facility maturity. We view the maturity of the revolver as being extended to July 2017 from August 2013 since General Cable is effectively removing the revolver's springing maturity by refinancing the Notes due 2013.

The change in the rating outlook to stable from negative also reflects the improvement in General Cable's liquidity profile. The proposed refinancing transaction will address our concerns about the looming maturity of its $355 million senior convertible notes due 2013, which would have become current liabilities in November 2012.

The B1 rating assigned to the proposed Sr. Unsecured Notes due 2022 is one notch below the corporate family rating, as the new notes will rank pari passu to the company's existing Floating Rate Sr. Unsec. Notes due 2015. Proceeds from the proposed notes issuance will be used to retire the existing Senior Convertible Notes due 2013 and Senior Unsecured Notes due 2017, at which time we will withdraw the ratings assigned to these debt instruments. The unsecured notes are structurally subordinated to the company's asset-based revolving credit facility. Additionally, the large amount of 20-day trade payables, which have the highest recovery rates in the capital structure, as well as the foreign trade payables and drawn lines of credit, which are commitments of General Cable's non-guarantor subsidiaries and are likely to be repaid from these subsidiaries' cash flows before cash is repatriated to the US, provide downward pressures on the Notes' ratings, as well.

The ratings could be upgraded if General Cable demonstrates the ability to generate meaningful earnings and significant levels of free cash flow resulting in adjusted debt-to-EBITDA sustained below 4.5 times or EBITA-to-interest trending towards 3.5 times (all ratios incorporate Moody's standard accounting adjustments).

The ratings could come under pressure if the liquidity profile weakens, for instance, as a result sizeable drawdowns under the revolving credit facility to finance future acquisitions. Continued weakness in operating performance such that adjusted debt-to-EBITDA is sustained above 4.5 times or EBITA-to-interest expense remains below 3.0 times could result in negative rating actions (all ratios incorporate Moody's standard accounting adjustments). Also, the failure of the company to successfully integrate the Alcan Cable and Procables acquisitions may introduce additional ratings pressure.

The principal methodology used in rating General Cable was the Global Manufacturing Industry Methodology published December in 2010. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

General Cable Corporation, headquartered in Highland Heights, TN, is a global manufacturer of copper, aluminum and fiber optic and power cable products. Primary end markets served include electrical utility, electrical infrastructure, and construction. Revenues for the twelve months through June 29, 2012 totaled about $5.8 billion.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Information sources used to prepare the rating are the following : parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service information.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Peter Doyle Vice President - Senior Analyst Corporate Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Brian Oak MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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Um die Übersicht zu verbessern, haben Sie die Möglichkeit, die Analysen für Rio Tinto plc nach folgenden Kriterien zu filtern.

Alle: Alle Empfehlungen
Buy: Kaufempfehlungen wie z.B. "kaufen" oder "buy"
Hold: Halten-Empfehlungen wie z.B. "halten" oder "neutral"
Sell: Verkaufsempfehlungn wie z.B. "verkaufen" oder "reduce"

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