Moody’s Investors Service assigned a Baa2 rating to Brunswick Corporation’s proposed senior unsecured notes. The ratings remain under review for downgrade. Net proceeds will be used to prepay all or a portion of the $300 million, 364-day facility. On August 9, 2018, Brunswick acquired the Global Marine Business of Power Products Holdings, LLC. for $910 million. The acquisition was funded with a $800 million term loan (including a $300 million 364 day facility) and cash on hand.

Rating assigned and on review for downgrade: senior unsecured notes due 2048 at Baa2.

Ratings Rationale

Brunswick’s Baa2 senior unsecured rating is on review for downgrade due to the pending spin-off of Brunswick’s Fitness business announced in March 2018, which is not expected to close until Q1 2019. Moody’s rating review will continue to focus on Brunswick’s capital structure and ongoing business profile following the spin. Moody’s review will also include stress testing the company’s performance given a reasonable economic downturn.

The principal methodology used in this rating was the Consumer Durables Industry methodology published in April 2017.

Brunswick, headquartered in Mettawa, IL, is a global designer, manufacturer and marketer of marine engines, pleasure boats and fitness equipment. Pro forma revenues in 2017, including Power Products, Sea Ray Sport Boats and Cruisers and excluding the Fitness business, approximate $4 billion.