Moody's: Empire, notes at B3

Moody's Investors Service said it assigned a B3 rating to Empire Today, LLC's proposed $150 million senior secured notes, along with a B3 corporate family and probability of default ratings.

The outlook is stable.

The proceeds will be used to repay all of the company's existing outstanding debt, including about $36 million in subordinated notes held by Empire's owner, Mercury Capital.

The company also will issue a new $20 million asset-based revolving credit facility that will likely be undrawn at closing.

The ratings reflect Empire's small scale, high leverage and weak interest coverage, Moody's said.

The ratings also consider the discretionary nature of the company's products and its high susceptibility to macroeconomic factors, evidenced by a severe downturn in the company's revenues and earnings during the recent recession, the agency said.

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