Rinker Boat Co.'s term loan fell around 10 points to the mid-80s because of poor sales, according to a dealer. JPMorgan leads the $140 million term loan for the Indiana-based company that designs, develops and makes boats and cruisers.
Rinker is owned by Code Hennessy & Simmons, a private equity firm, as well as management and other shareholders. Code Hennessey made a majority equity investment in Rinker Boats in August 2004. Last November, Rinker merged with Godfrey Conveyer Co., a large maker of pleasure boats. The merger transformed the company into the fourth largest pleasure boat maker in the U.S., according to Code Hennessey's Web site.
Moody's Investors Service rated Rinker's term loan B1 with a 3 loss given default rating. In a release from last October, which Moody's published at the time of Rinker's new debt financing for the merger with Godfrey, the agency said it expected December 2006 leverage at Rinker to be 5 times and pro-forma interest coverage to be about 2 times. It said the company's high leverage, a low proportion of tangible fixed assets and a high proportion of intangible assets, as well as limited financial flexibility and uncertainty in consumer spending trends, were factored into its ratings of the company's credit. A Rinker official did not return a call seeking comment.