Moody’s rates Avon notes Ba1

Moody's Investors Service said it assigned a Ba1 rating to $400 million of senior secured notes being offered by Avon International Operations Inc., a wholly owned domestic subsidiary of Avon Products Inc.

Avon Products’ other ratings, including its Ba3 corporate family rating and B1 senior unsecured note ratings, as well as its negative outlook, are unchanged.

The new notes, along with $250 million of cash on hand, will be used to fund Avon's tender offer for up to $650 million in aggregate principal amount of unsecured notes. The tender offer, announced on Aug. 1, is being offered to holders of the 5¾% $250 million notes due March 2018, 4.2% $250 million notes due July 2018, 6½% $350 million notes due March 2019 and the 4.6% $500 million notes due March 2020. The exchange offer is expected to close later in August.

Separately, if over time, the amount of secured debt at Avon materially exceeds the amount contemplated with this new $400 million offering, Avon's remaining B1-rated unsecured notes will be lowered one notch to B2, reflecting the larger amount of secured claims ranking ahead of them.

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