Moody’s gives B2 to Focus Brands facility

Moody's Investors Service said it assigned a B2 rating to Focus Brands Inc.'s proposed $625 million senior secured bank facility and affirmed the B2 corporate family rating, B2-PD probability of default rating and existing debt ratings.

The outlook is stable.

"The refinancing addresses relatively near term maturities as the company's capital structure was set to go current in 2017, and does not materially change in leverage or interest coverage," Moody’s analyst Peter Trombetta said in a news release.

"The refinancing also eliminates financial maintenance covenants and the credit agreement allows for incremental debt that the company could use for acquisitions in the future."

Proceeds from the $625 million bank facility – made up of a $25 million five-year senior secured revolver and a $600 million seven-year senior secured term loan – will be used to refinance the company's existing first- and second-lien term loans ($588 million outstanding), put $5 million on the balance sheet and pay fees and expenses.

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