Moody's rates Esselte notes B3

Moody's Investors Service said it assigned a B3 rating to the proposed €130 million senior notes due 2011 of Esselte Group Holdings AB and assigned a B1 senior implied rating.

The outlook is stable.

Moody's said the senior implied rating reflects the company's leading brands, relatively moderate debt balances, and diversified revenue base. Nonetheless, the ratings also consider Esselte's meaningful non-debt obligations and ongoing growth and restructuring plans, which are likely to constrain free cash flow generation.

Proceeds from the proposed senior notes (net of transaction fees) will be loaned to Esselte's subsidiaries, which in turn will repay borrowings under their senior and mezzanine credit facilities. The debt that is being repaid had primarily been raised to fund the company's acquisition by affiliates of J.W. Childs in August 2002.

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