Moody's lifts Gregg, rates loan B2

Moody's Investors Service said it upgraded Gregg Appliances, Inc.'s corporate family and probability-of-default ratings to B1 from B2, assigned a B2 (LGD4, 62%) rating to its new secured term loan B due 2013 and affirmed the speculative grade liquidity rating at SGL-2.

The agency also affirmed the B2 rating on the company's existing senior unsecured notes and will withdraw ratings on those notes when they are repaid as part of a refinancing currently underway.

The outlook is positive.

The agency said the upgrade results from Gregg's improved debt protection measures resulting from solid operating performance over the past 12 months. Since fiscal year end March 2006, the debt-to-EBITDA ratio has reduced by almost two full turns and free cash flow to net debt has risen above 10%.

Gregg's B1 corporate family rating balances its solid franchise that benefits from a comprehensive suite of national name brands with broad demographic appeal and its commissioned sales force against its relatively small size and geographic concentration in eight states, Moody's said.

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