Moody's rates American Greetings revolver Baa3

Moody's Investors Service said it assigned a Baa3 (LGD 2, 21%) rating to American Greetings Corp.'s $400 million revolving credit facility due January 2017.

The agency also affirmed its Ba1 corporate family rating, Ba1 probability of default rating and Ba2 senior unsecured notes rating.

The speculative-grade liquidity rating was downgraded to SGL-2 from SGL-1.

The Baa2 rating on the existing revolver was withdrawn.

The outlook remains stable.

Revenue will modestly improve or at least stay flat in fiscal 2013, said Kevin Cassidy, a Moody's analyst.

The new revolver is rated one notch below the existing revolver rating because of the higher proportion of secured debt in the revised capital structure, the agency said.

The rating reflects the business risks inherent in the greeting-card industry, which is characterized by low or in some cases declining growth rates, its modest size with revenue of about $1.7 billion, weak consumer branding and heavy competition, Moody's said.

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