The bank debt for Werner Holding Co. ticked up into the low 90s following the announcement that the company has entered into a strategic alliance with Lowe's Companies. The bank debt had been languishing in the 88 range, according to one trader, although no trades could be confirmed at those levels.
Werner's bank debt originally came under pressure after the company disclosed that The Home Depot would purchase its aluminum and fiberglass stepladders directly from China. At that time, the debt fell into the mid 90s from the 101-1013/4 range, where it was quoted prior to the disclosure, according to LoanX (LMW, 11/3), now known as Mark-It Partners/Loan X. In conjunction with its recent announcement regarding Lowe's, Werner disclosed that the company will also discontinue supplying Werner branded products to The Home Depot.
Moody's Investors Service did not react as positively to this news as the loan market did. The rating agency lowered Werner's Ba3-rated bank debt to B1, expecting the company to encounter a challenging covenant compliance environment as it seeks to replace The Home Depot markets. A Werner spokesman declined comment.