Moody's rates Restoration loan Ba3

Moody's Investors Service said it rated Restoration Hardware, Inc.'s planned $1 billion incremental first-lien term loan Ba3 and trimmed the issuer’s senior secured term loan rating to Ba3 from Ba2.

The agency also lowered Restoration Hardware’s corporate family rating to Ba2 from Ba2 and probability of default rating to Ba3 from Ba2. The speculative grade liquidity score is unchanged at SGL-1.

“The downgrade reflects governance considerations including financial strategies that have been more aggressive than originally expected and tend favor shareholders over creditors. The downgrade also reflects that the proposed debt issuance will increase leverage at a time when RH is facing a challenging supply chain and inflation environment,” Moody’s said in a press release.

The proceeds are expected to be used for general corporate purposes.

The outlook is stable.

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