Moody’s rates Torrid, loan B2

Moody’s Investors Service said it assigned ratings to Torrid LLC, including a B2 corporate family rating, B2-PD probability of default rating and a B2 rating for the proposed senior secured term loan.

The outlook is stable.

Proceeds from the proposed $350 million term loan due 2028 and $135 million of balance sheet cash will be used to refinance existing debt and fund a $268 million shareholder distribution.

Moody’s said Torrid's corporate family rating is constrained by the company's high pro-forma leverage of 4x, as adjusted by Moody’s, and governance factors, specifically the risk of future debt-funded dividend distributions given the company's ownership by Sycamore Partners since the 2013 leveraged buyout of the combined Hot Topic and Torrid entity.

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