Moody's gives Horizon loan Ba1, convertibles B3

Moody's Investors Service said it assigned a Ba1 rating to the planned $325 million first-lien senior secured credit facility, consisting of a $200 million revolver and $125 million term loan A, and a B3 rating to the planned $300 million of convertible senior unsecured notes of Horizon Lines, Inc.

The new credit facility and notes are being issued as part of a broader refinancing plan by the company, the agency said.

The outlook is stable.

Proceeds of the new credit facility and of the convertible notes will fund the previously announced offer by Horizon Lines to purchase 100% of its subsidiaries' outstanding 9% senior notes and 11% senior discount notes and to replace the subsidiaries' existing senior secured credit facility, Moody's said.

According to the agency, the ratings reflect Horizon Line's leading position in its core markets, which is enhanced by the protective benefits of the U.S. Jones Act trade and the important link in customers' distribution chains that Horizon provides.

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