Moody's ups Interline Brands

Moody's Investors Service said it upgraded the ratings of Interline Brands Inc., contingent upon the completion of its proposed $200 million initial public offering of its stock and a concurrent refinancing of its bank credit facility. The outlook is stable.

Moody's upgraded Interline's senior implied rating to B1 from B2, issuer rating to B2 from B3, $130 million 11½% senior subordinated notes due 2011 to B3 from Caa1, $100 million senior secured revolving credit facility due 2008 to B1 from B2 and $100 million senior secured term loan due 2010 to B1 from B2.

Proceeds of the proposed $200 million IPO will be used to pay down the senior subordinated debt and the senior secured term loan, redeem preferred stock, pay fees and expenses, terminate interest rate swaps and hold the remainder as cash for general corporate purposes.

Moody's said the upgrade reflects the positive impact of the IPO on the company's credit profile, in particular a reduction in debt leverage and interest expenses.

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