Moody's rates TLC Vision loans B1

Moody's Investors Service said it assigned a B1 corporate family rating, B2 probability-of-default rating and SGL-2 speculative grade liquidity rating to TLC Vision Corp. and B1 (LGD3, 31%) ratings to its $25 million senior secured revolver due 2012 and $85 million senior secured term loan due 2013.

The outlook is stable.

Proceeds from the credit facilities will be used to support the company's recently announced share repurchase auction, to fund working capital and for general corporate purposes.

The agency said the B1 corporate family rating considers the company's highly leveraged position, modest size and concentration within the refractive lens market. Pro forma for the increased debt resulting from the new credit facility, the company's adjusted debt-to-EBITDA ratio was 5.5x for the 12 months ended March 31, although Moody's expects the ratio will decline to 5x.

The corporate family rating acknowledges TLC Vision's strong competitive position within the highly fragmented refractive market and its stable cash flow generation, Moody's added.

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