Moody's lifts Harman credit out of junk status
STAMFORD, Conn. -- Moody's Investors Service on Thursday upgraded the credit rating for audio gear maker Harman International Industries Inc. to investment grade and out of junk status, saying that recent refinancing of its debt gives it more flexibility.
Moody's assigned "Baa3" ratings to a $750 million unsecured line of credit and a $300 million unsecured loan. The line of credit replaces a $550 million line of credit. Harmon also used the $300 million loan plus $100 million in cash to pay off $400 million in convertible notes that were due Oct. 15.
Moody's previously had a "Ba1" corporate family rating for Harman, along with other debt ratings.
Moody's expects Harman's new debt structure to "strongly support investments across its business lines."
Moody's noted that Harman gets 40 percent of its revenue from Europe, but a changing mix of products should help offset any slowdown in Europe.
The upgrade follows a similar move by Standard & Poor's on Sept. 7, when it upgraded Harman's corporate credit rating to "BBB-," which is investment grade.
Dinesh C. Paliwal, Harman's chairman, president, and CEO, said the upgrades underscore Harman's "solid financial position and ability to execute on our profitable growth strategy."
Harman shares fell 16 cents to close at $43.12.