Moody's ups Herbalife notes to B2

Moody's Investors Service said it upgraded Herbalife Ltd.'s senior unsecured debt for its $165 million 9½% senior notes due 2011 to B2 from B3 and issuer ratings to B2 from B3 and affirmed remaining ratings and the positive outlook of Herbalife following the company's recent initial public equity offering and subsequent debt repayment.

Moody's said the upgrade of the company's senior unsecured debt and issuer ratings concludes the review actions initiated on Herbalife's unsecured debt ratings on Nov. 9 following the announcement of its planned IPO and other recapitalization transactions.

Although ultimate IPO proceeds were less than originally contemplated, Moody's said an even greater reduction in special dividend payments resulted in debt repayment that was substantially identical to plan.

The rating upgrades reflect the significant reduction in higher-priority and pari passu obligations under the recapitalization, including the near-full tendering of senior subordinated notes and the clawback of $110 million of Herbalife's senior notes, according to Moody's.

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