May 30 – Standard & Poor’s Ratings Services said today it assigned its
preliminary ‘BBB-‘ senior unsecured debt rating and preliminary ‘BB+’
subordinated debt rating to Benton Harbor, Mich.-based Whirlpool Corp.’s
Rule 415 universal shelf registration. In addition, we assigned a ‘BBB-‘
rating to the company’s proposed issuance of $300 million senior unsecured notes
due 2022. We expect net proceeds from the debt issue to refinance existing
indebtedness. As a result, we estimate leverage, as measured by the ratio of
total adjusted debt to EBITDA, to remain unchanged following the offering. For
the 12 months ended March 31, 2012, we estimate
adjusted leverage was about 2.8x.
The ratings on Whirlpool Corp. reflect our opinion that the company has a
“satisfactory” business risk profile and an “intermediate” financial risk
profile. Key credit factors considered in our assessment of Whirlpool’s
business risk include the company’s strong market position as the largest
major appliance manufacturer in the world, supported by its portfolio of
well-recognized brand names, focused research and development efforts, and
geographic diversity. We also factored into our business risk assessment our
view of the company’s intense competition from several large, well-capitalized
international companies, participation in a cyclical industry, and exposure to
fluctuating raw material costs. The company’s intermediate financial risk
profile is supported by Whirlpool’s liquidity that we forecast should remain
strong despite meaningful cash requirements over the next few years, and
credit measures that are close to indicative ratio ranges for an intermediate
financial risk profile, which include leverage of 2x-3x and FFO to debt of
30%-45%.
For the complete rating analysis, please refer to our research report on
Whirlpool Corp., published March 30, 2012 on RatingsDirect.
Related Criteria And Research
— Methodology And Assumptions: Liquidity Descriptors For Global
Corporate Issuers, Sept. 28, 2011
— Business Risk/Financial Risk Matrix Expanded, May 27, 2009
— Key Credit Factors: Business And Financial Risks In The Branded
Consumer Products Industry, Sept. 10, 2008
— 2008 Corporate Criteria: Rating Each Issue, April 15, 2008
RATINGS LIST
Whirlpool Corp.
Corporate credit rating BBB-/Stable/A-3
RATINGS ASSIGNED
Whirlpool Corp.
Senior unsecured
$300 mil. notes due 2022 BBB-
Rule 415 universal shelf registration BBB-(prelim)
Subordinated
Rule 415 universal shelf registration BB+(prelim)
