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Moody's may upgrade Revlon
Moody's Investors Service said it has placed the debt ratings of REV Holdings Inc. and Revlon Consumer Products Corp. on review for possible upgrade following the announcement that the company has reached agreements with certain bond and equity holders, which are likely to remarkably reduce its debt levels.
In addition, Moody's has placed Revlon's SGL-4 speculative grade liquidity on review for possible upgrade, reflecting the potential cash flow benefits from the prospective debt reduction, recent approval for $125 million in supplemental credit lines from shareholder MacAndrews and Forbes, and better-than-anticipated year-end liquidity.
Ratings placed on review for possible upgrade include the senior implied rating at Caa2; the $250 million senior secured bank credit facilities due 2005 at B3, the $363 million 12% senior secured notes due 2005 at Caa1, the $250 million 9% senior notes due 2006 at Ca, the $250 million 8.125% senior notes due 2006 at Ca, the $650 million 8.625% senior subordinated notes due 2008 at C, the senior unsecured issuer rating at Ca, and the speculative grade liquidity rating of SGL-4.
Fidelity Management & Research Co. and MacAndrews and Forbes have agreed to exchange about $630 million in debt obligations for common stock, and MacAndrews and Forbes has committed to backstop an additional $300 million in debt exchange offers or equity rights offerings (the proceeds of which would be used to reduce debt).
Revlon anticipates that at least $930 million, or nearly half of its December 2003 debt obligations, will be reduced by March 2006, and that at least $778 million will be eliminated during the first quarter of 2004.
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