Madison IAQ LLC Rated Preliminary 'B' On Merger, Outlook Stable; Secured And Unsecured Debt Also Rated

U.S.-based Madison IAQ LLC, a global provider of indoor air quality solutions, is issuing $3.4 billion of debt to fund its proposed $3.6 billion acquisition of Melrose PLC's Nortek Air indoor air quality business. The combination of the two businesses will create a highly leveraged but profitable company with over $2 billion of revenue and good market positions in its indoor air quality industry niches. We assigned our preliminary 'B' issuer credit rating to Madison IAQ LLC, our preliminary 'B' issue-level rating to the proposed senior secured debt, and our preliminary 'CCC+' issue-level rating to the proposed unsecured notes. The stable outlook reflects the potential for steady to modestly improving credit metrics over the next year in an environment where

...June 3, 2021 - U.S.-based Madison IAQ LLC, a global provider of indoor air quality solutions, is issuing $3.4 billion of debt to fund its proposed $3.6 billion acquisition of Melrose PLC's Nortek Air indoor air quality business. - The combination of the two businesses will create a highly leveraged but profitable company with over $2 billion of revenue and good market positions in its indoor air quality industry niches. - We assigned our preliminary 'B' issuer credit rating to Madison IAQ LLC, our preliminary 'B' issue-level rating to the proposed senior secured debt, and our preliminary '###+' issue-level rating to the proposed unsecured notes. - The stable outlook reflects the potential for steady to modestly improving credit metrics over the next year in an environment where an improving domestic economy and a heightened awareness of indoor air quality issues raised by the pandemic are expected to support good demand for Madison IAQ's products. FARMERS BRANCH (S&P Global Ratings) June...

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