Moody's cuts True Religion loan to B2

Moody's Investors Service said it downgraded True Religion Apparel, Inc.'s first-lien term loan due 2019 (was 2020) to B2 from B1.

The second-lien term loan was affirmed at Caa1, the corporate family rating remains at B2 and the outlook remains stable.

Moody's said the downgrade of the first-lien term loan reflects that the loan was upsized to $400 million from $375 million and the second-lien term loan was reduced to $85 million from $110 million. In addition, there will be a $10 million draw on a revolver, which increased to $60 million from $50 million.

As a result of the upsized asset-based revolver, which has a first-lien on accounts receivable and inventory, and the reduction in credit support from the downsized second-lien term loan, Moody's said its expectations for recovery for the first-lien term loan in a default scenario have reduced.

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