Moody's may lift American Achievement

Moody's Investors Service said it placed American Achievement Group Holding Corp.'s Caa1 corporate family rating and Caa2 probability of default rating under review for possible upgrade following news of a proposed refinancing of the company's capital structure.

Following the close of the transaction and review of final documents, the corporate family rating is expected to be raised to B3 and the probability of default rating upgraded by two notches to the same level as the corporate family in order to reflect the diminished risk of default, Moody's said.

The agency also said it assigned a provisional B3 rating to the $365 million of American Achievement Corp.'s senior secured notes.

The new capital structure alleviates concerns regarding the company's maturity profile and will limit shareholder de-capitalization, Moody's said.

The review for possible upgrade also considers the company's relatively stable operating performance through the economic downturn and its ability to generate free cash flow historically despite pressure on the top line, the agency said.

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