Moody's ups Fender

Moody's Investors Service said it upgraded Fender Musical Instrument's corporate family rating and probability of default rating to B1 from B2 following its improved operating performance and improved credit metrics.

At the same time, Moody's said it assigned a B2 rating to the $200 million senior secured term loan and proceeds from the transaction will be used to refinance the company's existing debt.

The outlook is stable.

"The upgrade reflects Fender's improved operating performance as evidenced by a recent doubling of operating cash flow and a history of continued debt reduction" said Kevin Cassidy, vice president/senior analyst at Moody's.

"The combination of both resulted in an improvement of retained cash flow (operating cash flow less working capital changes and dividends) as a percentage of adjusted debt to double digit levels."

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