Moody's rates Radio Systems loans B1

Moody's Investors Service said it assigned a B1 (LGD3, 33%) rating to Radio Systems Corp.'s proposed $225 million senior secured facility, consisting of a $75 million revolving credit facility due 2015 and a $150 million term loan due 2015. Moody's also affirmed the company's B2 corporate family rating and B3 probability of default rating.

Moody's affirmed and will withdraw, at completion of the proposed refinancing, the company's senior secured revolving credit facility due 2011 at B2 (LGD3, 31%) and its senior secured term loan due 2013 at B2 (LGD3, 31%).

The outlook is stable.

The proceeds of the notes will be used to refinance existing debt.

The agency said Radio Systems' B2 corporate family rating is limited by its modest scale, narrow product focus, exposure to discretionary consumer spending trends, the soft retail environment and increased acquisition risk and a potential call on cash in an equity put option, exercisable any time after Sept. 15, 2011.

The rating is supported by the company's moderate leverage with debt to EBITDA consistently below 3.5 times, good interest coverage, free cash flow generation that has been applied to debt reduction, recognized brand names and strong operating margins, Moody's said.

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