Moody’s lifts North Atlantic Trading, loans

Moody's Investors Service said it upgraded the ratings for North Atlantic Trading Co., Inc., a subsidiary of Turning Point Brands, Inc., including its corporate family rating to B2 from B3 and probability of default rating to B2-PD from B3-PD.

The agency also upgraded the first-lien senior secured term loan to B1 from B2 and affirmed the second-lien senior secured term loan at Caa1.

A speculative grade liquidity rating of SGL-3 was assigned.

The outlook is stable.

Moody’s said these actions follow the Turning Point’s use of initial public offering (IPO) proceeds in May 2016 to pay down borrowings and a concurrent debt exchange. The agency expects these actions to cumulatively reduce financial leverage (debt/EBITDA) to 4.4 times from 6.4 times while the cash interest reduction will improve free cash flow and allow for greater reinvestment in growth opportunities.

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