Moody's may upgrade Del Labs

Moody's Investors Service said it placed Del Laboratories, Inc.'s B3 corporate family and probability-of-default ratings, B1 (LGD2, 28%) $185 million floating-rate senior secured notes due 2011, Caa2 (LGD5, 81%) $175 million 8% senior subordinated notes due 2012 and SGL-3 speculative-grade liquidity rating under review for possible upgrade.

The review was prompted by the company's announcement that its parent company, DLI Holding Corp., will be acquired by Joh. A. Benckiser GmBH subsidiary Coty Inc.

While public financial statements on Coty and its parent company are not available, the review for possible upgrade is based on Moody's understanding that Coty and Benckiser are significantly larger consumer products companies with likely better financial risk profiles than Del.

The transaction remains subject to governmental, regulatory and shareholder approvals and is expected to close by Dec. 31.

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