Moody’s rates Ascena CFR, loan Ba2

Moody's Investors Service said it assigned a Ba2 corporate family rating and Ba2-PD probability of default rating to Ascena Retail Group, Inc.

The agency also assigned a SGL-2 speculative grade liquidity rating and Ba2 rating to the proposed $1.8 billion senior secured term loan B due 2022.

The outlook is stable.

Proceeds from the new term loan along with around $129 million borrowings on a new $600 million asset-backed revolver maturing 2020 (unrated), $466 million Ascena equity and $150 million balance sheet cash will be used to finance the acquisition of specialty retailer ANN INC. for total consideration of around $2.2 billion.

The company will also refinance its existing $500 million revolving credit facility ($155 million outstanding as of April 12). The acquisition is expected to close in September 2015.

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