Moody's revises Revlon outlook to developing

Moody's Investors Service said it has affirmed the debt ratings of REV Holdings Inc. and Revlon Consumer Products Corp. and revised the outlook to developing from negative.

Ratings affirmed include the company's senior implied rating at Caa2; speculative grade liquidity rating at SGL-4; $250 million senior secured bank credit facilities due 2005 at B3; $363 million 12% senior secured notes due 2005 at Caa1; $250 million 9% senior notes due 2006 at Ca; $250 million 8.125% senior notes due 2006 at Ca; $650 million 8.625% senior subordinated notes due 2008 at C; and senior unsecured issuer rating of Ca.

Moody's said the rating action follows Revlon's recent announcement that it is considering capital transactions to strengthen its balance sheet and reflects uncertainty regarding the company's long-term capital structure and recovery prospects for its various debt classes, many of which are rated at or near Moody's lowest rating levels.

Earlier this month, Revlon announced that its management had been authorized to explore transactions to strengthen its balance sheet and to increase equity, potentially including the issuance of debt or equity for cash or in exchange for Revlon debt.

Further, Revlon announced that it has received board approval for an additional $125 million (12% PIK to maturity) of unsecured term loans, which are being provided by MacAndrews & Forbes Holdings Inc. on terms similar to M&F's $100 million line extended to Revlon in early 2003.

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