Moody's may up Prestige Brands

Moody's Investors Service said it confirmed the B1 ratings on the first lien senior secured credit facilities of Prestige Brands Inc. and reiterated its review for possible upgrade on Prestige's other long-term ratings that began on Dec. 2.

Moody's confirmed Prestige Brands' B1 rated $50 million senior secured revolving credit facility due April 6, 2009 and $373 million senior secured term loan facility due April 6, 2011.

On review are the company's B2 rated $100 million second-lien senior secured term loan C facility due Oct. 6, 2011, Caa1 rated $210 million 9¼% senior subordinated notes due April 15, 2012 and B3 senior unsecured issuer rating.

Moody's said the review continues to reflect the prospects for improved liquidity and debt protection measures given Prestige's stated plans to reduce debt with proceeds from its proposed $415 million initial public equity offering.

As such, funded leverage may decline to around 4.8x EBITDA from pro forma levels at September of around 6.5x and interest coverage may improve to over 4.0x from just under 3.0x.

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