Moody's rates Vector notes Ba3

Moody's Investors Service said it assigned a Ba3 rating to Vector Group Ltd.'s proposed offering of $375 million in senior secured second-lien notes due 2021.

Moody's also affirmed the company's B2 corporate family rating and B2-PD probability of default rating.

Moody's said the change to a stable outlook reflects its expectation that credit metrics, including interest coverage and debt-to-EBITDA, will modestly improve over the next 12 to 18 months and the company's liquidity profile will continue to remain strong.

Proceeds from the proposed offering combined with funds provided by the company's November issuance of $230 million subordinated convertible notes (unrated) will be used to refinance existing debt and to invest in existing and new real estate investments through its wholly owned subsidiary, New Valley LLC.

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