Moody’s: American Greetings notes B3, loans Ba2

Moody's Investors Service said it assigned American Greetings Corp. a B1 corporate family rating and B1-PD probability of default rating.

At the same time, the agency assigned a B3 rating to the $375 million of newly proposed eight-year senior unsecured notes, and a Ba2 rating to the newly proposed five-year senior secured credit facilities, which will consist of a $300 million term loan A and $275 million revolving credit facility.

The outlook remains stable.

Proceeds from the new notes and term loan A, together with roughly $98 million of borrowings on the new revolving credit facility (pro forma for Nov. 30, 2016), will be used to repay $225 million of 7 3/8% senior unsecured notes due 2021, $185 million of outstanding borrowings on its existing term loan A, $56 million of existing revolver borrowings, $285 million of Holdco PIK notes at OpCo's indirect parent, Century Intermediate Holding Co. 2 and pay estimated fees and breakage costs associated with early repayment of the debt of nearly $22 million.

As a result of the expected repayment of debt at Century, the existing ratings and outlook at Century will be withdrawn upon the close of the transaction.

"The proposed transaction is slightly leveraging but we anticipate the company will deleverage at a moderate pace over time, primarily driven by solid cash flow generation that can be used for debt repayment," Moody's assistant vice president, analyst Brian Silver said in a news release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.