Moody's gives Constellation notes Baa3

Moody's Investors Service said it assigned a Baa3 rating to the 10-year senior unsecured notes to be sold by Constellation Brands, Inc.

The proceeds will be used for general corporate purposes including repaying the remaining portion of the unrated, delayed-draw term loan due in 2025 that was used to help fund the $1.5 billion consideration related to the conversion of the super-voting class B common stock to class A common stock.

“The company's Baa3 senior unsecured ratings and stable rating outlook are not affected because the refinancing is leverage neutral and extends the maturity of a portion of its debt. The buyout related to the stock conversion was leveraging, although Moody's expects that Constellation will reduce total debt over the next two years. The company also favorably reduced its leverage target subsequent to the conversion announcement,” the agency said in a statement.

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