Moody’s cuts Reynolds Group loans, notes to B2

Moody's Investors Service said it affirmed the B3 corporate family rating, B3-PD probability of default rating and positive outlook of Reynolds Group Holdings Ltd.

Additionally, the agency downgraded all senior secured credit facilities and senior secured notes to B2 from B1.

The actions are in response to the company's announcement that it is issuing a $500 million add-on term loan and using the proceeds, along with cash on the balance sheet, to retire senior unsecured notes.

Proceeds from the $500 million add-on term loan, along with $755 million of cash from the balance sheet, will be used to retire about $1.2 billion of debt as well as pay fees and expenses related to the transaction.

Moody’s said the downgrade reflects the increase in the proportion of secured debt in the capital structure and reduction of unsecured debt as cushion beneath it.

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