Moody's cuts Oriental Trading, rates loans B3, Caa1

Moody's Investors Service said it rated the proposed first-lien bank credit facility and $180 million second-lien term loan of Oriental Trading Co., Inc. at B3 and Caa1, respectively. The first-lien facility includes a $50 million revolving credit facility and a $410 million term loan.

Moody's also lowered the corporate family rating to B3 and assigned a stable outlook.

The rating action considers the proposed financing that will be associated with the pending leveraged buyout of Oriental Trading by The Carlyle Group and co-investors. The acquisition will be financed by the new first-lien and second-lien loans, non-rated holding company mezzanine debt and cash equity.

The downgrade is principally driven by the substantially increased leverage and fixed charge burden that will result from the transaction.

Weighing down the overall rating with low non-investment grade scores are the company's higher leverage and modest fixed charge coverage post-transaction, a relatively small size in revenue terms and competition including from other catalog/Internet marketers.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.