Moody's rates Wella loans B2

Moody's Investors Service said it assigned a B2 corporate family rating and B2-PD probability of default rating to Rainbow UK MidCo 2 Ltd. (Wella Co.).

The company is an intermediate holding company within the Wella group formed for the purpose of the acquisition of Coty's Professional Beauty business by funds affiliated with KKR & Co. Inc.

Concurrently, Moody's said it assigned B2 ratings to the proposed $1.8 billion equivalent (split into dollars, euros and pounds) seven-year guaranteed senior secured term loan B and to the pari passu ranking $300 million 6.5-year guaranteed senior secured revolving credit facility.

The outlook is positive.

The term loan B shall be issued by Rainbow Finco Sarl and co-borrowed by Wella US Operations LLC. The revolver shall be issued by Wella US Operations LLC and co-borrowed by Wella Treasury Ltd. and Rainbow UK Bidco Ltd., all wholly owned subsidiaries of the company.

The proceeds of the term loan B will be used, alongside $300 million of payment-in-kind notes, to refinance the group's existing debt, make a shareholder distribution and pay associated fees and expenses.

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