Moody's rates American Greetings loans Baa3

Moody's Investors Service said it affirmed American Greetings Corp.'s corporate family and probability of default ratings at Ba2 and senior unsecured note rating of Ba3 (LGD5, 72%). The agency also said it assigned a Baa3 (LGD2, 19%) rating to the new senior secured $350 million revolving credit facility due 2015 and withdrew the existing bank debt ratings. The agency also said it upgraded its speculative grade rating to SGL-1 from SGL-2.

The outlook is stable.

The company repaid its existing term loan with cash from its balance sheet, Moody's said.

The agency said it expects the company will continue with its stable operating performance and conservative credit metrics, including notable deleveraging.

The ratings also reflect its strong cash flow, undrawn revolving credit facility and significant flexibility under its financial maintenance covenants, Moody's added.

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