Moody's rates Energizer notes B2

Moody's Investors Service said it confirmed the B1 corporate family rating and B1-PD probability of default rating of Energizer Holdings, Inc.

The agency also said it confirmed the Ba1 (LGD 1) rating on the company's $1.6 billion senior secured credit facilities.

Moody's also said it confirmed the rating on the company's $600 million unsecured global notes at B2 (LGD 4), the rating on the $500 million unsecured global notes at B2 (LGD 4) and the rating on the €650 million bonds issued by Energizer Gamma Acquisition BV at B2 (LGD 4).

Energizer Gamma Acquisition is a wholly owned subsidiary of Energizer, the agency said.

The euro bonds benefit from a guaranty from the parent company, Energizer Holdings, but in liquidation are ahead of the debt at Energizer, Moody's explained.

Moody's also said it assigned a B2 (LGD 4) rating on the company's proposed $600 million unsecured notes.

The proceeds from the new notes in addition to about $376 million of cash equity and Energizer shares valued at $247 million will be used to complete the $1.25 billion acquisition of Spectrum Brands' global auto care business.

The outlook is stable.

This concludes a review that began in November when Energizer announced its acquisition of Spectrum Auto, Moody's said.

The ratings reflect the company's concentration in the declining battery category, which is facing a slow secular decline as consumer products are increasingly evolving toward rechargeable technologies, the agency said.

The ratings are constrained by the company's high pro forma financial leverage with debt-to-EBITDA estimated at about 5.3x, Moody's said.

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