Moody's Investors Service lowered the senior unsecured notes ratings for Whirlpool Corporation and its guaranteed subsidiary borrowers to B2 from B1 on Tuesday, while keeping several other ratings steady. The firm's Ba3 Corporate Family Rating, its Ba3-PD Probability of Default rating, and the Ba1 rating on Whirlpool's senior secured second-lien notes were all maintained.
Whirlpool expanded its planned senior secured second-lien notes offering to a total of $2.0 billion, up from the $1.5 billion previously proposed. The issuance is structured as two equal tranches of $1.0 billion each, maturing in 2031 and 2034. The company intends to direct the proceeds toward refinancing existing euro-denominated unsecured notes that mature in 2026 and 2027, and to repay borrowings under its existing revolver. In parallel, Whirlpool is putting in place a new $2.0 billion asset-based lending revolving facility due in 2031.
According to Moody's, the downgrade of the unsecured notes follows from the increased effective subordination those instruments now face within Whirlpool's capital structure after the upsized second-lien offering. The unsecured notes do not carry upstream guarantees from the company's operating subsidiaries, placing them effectively behind the enlarged pool of secured debt. Moody's also noted they remain structurally subordinated to operating-company liabilities including leases, pensions and accounts payable.
Moody's described Whirlpool's Ba3 Corporate Family Rating as reflective of the company's significant scale and solid market positions across North America and Latin America. At the same time, the rating agency highlighted constraints on the ratings tied to the highly cyclical nature of the consumer appliances sector and Whirlpool's leverage metrics. Debt-to-EBITDA was around 7.1x for the 12-month period ending in the first quarter of 2026.
Moody's noted corporate actions earlier this year that could aid deleveraging over time if operating performance improves: a February 2026 equity issuance and the suspension of the common dividend in May 2026. Nevertheless, the rating outlook remains negative, with Moody's pointing to high leverage, ongoing demand pressures and uncertainty about Whirlpool's ability to raise profitability and improve credit measures.
Moody's said the company's ratings could face further downgrade if Whirlpool fails to boost operating earnings or if free cash flow does not improve over the next 12 months to at least 3% of debt.
Context and next steps
The rating action centers on the interplay between secured and unsecured claims in Whirlpool's debt stack following the enlargement of the second-lien issuance, and on the company's current leverage profile. The new asset-based lending facility and the refinancing of euro-denominated unsecured notes are immediate uses of proceeds noted by the company.