Moody's ups Compass

Moody's Investors Service said it upgraded Compass Group Diversified Holding's speculative-grade liquidity rating to SGL 2 from SGL 3 due to the recent closing of the new $515 million senior secured credit facility.

The agency also said it affirmed the Ba1 rating on its $290 million senior secured revolving credit facility, B1 rating on its $225 million senior secured term loan, Ba3 corporate family rating and B1 probability of default rating.

The outlook remains stable.

The proceeds will be used from the sale of Staffmark to repay debt and the refinancing of its credit facility significantly improves Compass' liquidity profile, Moody's said.

The ratings reflect the company's strong industry and product diversification, moderate financial leverage and good interest coverage, Moody's said.

The ratings are constrained by the company's policy of distributing the majority of its operating cash flow to shareholders, the potential for further debt-funded acquisitions and the potential for lower demand for the company's products due to the uncertain economy, Moody's said.

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