Moody's ups Revlon ratings

Moody's Investors Service said it upgraded Revlon Consumer Products Corp.'s existing debt ratings and assigned a B2 rating to its proposed $680 million senior secured bank credit facilities and a Caa1 rating to its proposed $400 million senior unsecured notes.

Moody's upgraded Revlon's senior implied rating to B3 from Caa2, senior unsecured issuer rating to Caa1 from Ca, and $327 million senior subordinated notes due 2008 to Caa2. Revlon's speculative grade liquidity rating of SGL-4 remains under review for possible upgrade.

Moody's ratings review, which began on Feb. 13, was prompted by Revlon's announcement of a planned debt-for-equity exchange that subsequently resulted in debt reduction of around $800 million, including debt owned by Revlon Inc.'s controlling shareholder, MacAndrews & Forbes, and affiliates of Fidelity Investments.

The upgrade of Revlon's long-term debt ratings reflects the significant balance sheet and liquidity improvements that result from the proposed transaction and recent debt exchange as well as the strengthened operating platform established by the company's capable management team.

The outlook is stable.

Moody's said the new rating level recognizes Revlon's vastly improved financial flexibility due to its recent and proposed capital transactions, as well as its significant operating momentum.

Revlon's ratings are restrained by weak pro forma cash flow and high leverage levels, even following more than $600 million of debt reduction (pro forma fiscal 2003 through the debt exchange and refinancing) and the scale-down of its accelerated spending plans. Debt adjustments for under-funded pension plans of more than $220 million further constrain the ratings.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.