S&P rates new Elizabeth Arden notes B-

Standard & Poor's said it assigned its B- rating to Elizabeth Arden Inc.'s proposed $150 million senior subordinated notes, which are due 2014 and registered under Rule 144A.

S&P also affirmed its B+ corporate credit rating on the prestige beauty products company and raised its rating on the firm's senior unsecured notes one notch to B from B-, reflecting the firm's reduced use of secured debt financing.

The outlook is stable.

S&P said proceeds from the proposed senior subordinated debt offer will be used to repay $104 million in 11¾% senior secured notes due 2011 and $20 million in 10 3/8% senior unsecured notes due 2007.

S&P said the ratings on Elizabeth Arden reflect the company's narrow product portfolio, highly seasonal sales, and concerns about the very competitive fragrance business. These factors are partially mitigated by Elizabeth Arden's solid position in fragrances and its wide distribution, especially in the high growth mass-merchandising trade channel.

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