S&P rates Revlon loan B+, lifts notes to B+

S&P said it affirmed the B+ corporate credit rating on Revlon Consumer Products Corp. and removed the rating from CreditWatch negative, where it was placed in June following news that the company will acquire Elizabeth Arden.

The agency also said it assigned a B+ corporate credit rating to Revlon Inc., the parent company of Revlon Consumer.

The outlook is negative.

S&P also said it assigned a B+ rating to the company's proposed $1.8 billion term loan B maturing in 2023. The recovery rating is 3, indicating 50% to 70% expected default recovery.

The agency also said it does not rate the company's proposed $400 million asset-based lending revolving facility due 2021.

Revlon Consumer is the borrower under these debt instruments, S&P said.

The agency also said it raised the rating on the company's existing $500 million senior unsecured notes to B+ from B and revised the recovery on the notes to 4 from 5.

The 4 recovery rating indicates 30% to 50% expected default recovery.

The proceeds of the term loan, along with $100 million borrowings under its new $400 million revolver, will be used to fund the acquisition of Elizabeth Arden, refinance its existing term loans and repay existing Elizabeth Arden debt, S&P said.

The ratings reflect a belief that the acquisition will add new product categories to its portfolio, increase the number of channels it competes and enhance its scale and geographic footprint, the agency said.

The negative outlook considers an expectation that Revlon's leverage pro forma for the acquisition of Elizabeth Arden will increase to about 6x at the end of fiscal 2016, S&P said

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