Moody's rates Dollar Financial loans B3

Moody's Investors Service said it affirmed Dollar Financial Group, Inc.'s B3 corporate family rating and assigned B3 ratings to the company's $75 million senior secured revolving credit facility, National Money Mart Co.'s $295 million term loan and $25 million revolving credit facilities and Dollar Financial U.K. Ltd.'s $80 million senior secured term loan facility.

The outlook remains positive.

Proceeds from the new facilities will be used to fund the refinance Dollar Financial's existing senior unsecured notes and revolving credit facility and to acquire 82 of its Canadian franchise stores.

Moody's predicted the acquisitions will be immediately accretive to earnings and contribute $45 million to revenues and $19 million to EBITDA. Dollar Financial will realizes several other benefits from this transaction, such as lowering its consolidated tax burden, reducing its cost of debt via the lower interest rate on the new credit facilities and freeing up territory in Canada for future growth initiatives.

As a result of the increased debt load from the refinancing and acquisition, Dollar Financial's leverage, as measured by adjusted debt to EBITDAR, will worsen relative to the recent improvement that had resulted from the company's common equity issue and debt paydown, the agency said. Adjusted EBIT to interest expense will also deteriorate modestly.

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