Moody's assigns B2 to RugsUSA

Moody's Investors Service said it assigned first-time ratings to Runner Buyer, Inc. (RugsUSA), including a B2 corporate family rating and a B2-PD probability of default rating. In addition, Moody's gave a B2 rating to RugsUSA's upcoming first-lien senior secured $75 million revolving credit facility and $500 million term loan.

Term loan proceeds and equity from Francisco Partners will be used to finance the acquisition of RugsUSA by Francisco Partners and pay for transaction fees and expenses.

"RugsUSA has executed well in the online rug space, achieving solid and profitable growth," said Moody's analyst Raya Sokolyanska, in a press release. "While debt/EBITDA is relatively high pro-forma for the transaction, RugsUSA generates solid free cash flow, and we expect favorable near-term demand to support deleveraging."

The outlook is stable.

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