Moody’s gives Raley’s loan B3

Moody's Investors Service said it assigned a corporate family rating of B2 and a probability of default rating of B2-PD to Raley's.

The agency also assigned a B3 rating to the company's proposed senior secured seven-year $200 million term loan.

The outlook is stable.

Proceeds will be used to partially finance the acquisition of the majority of the company's shares by Michael Teel, the current CEO. Teel will become the 92% owner with sole voting control of Raley's Holding Co. and will roll over his existing equity stake in the company.

The remainder of the purchase price will be financed through subordinated seller notes of about $43 million and a drawdown of a portion of the company's $200 million ABL revolver (unrated).

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