Moody's lifts American Achievement, rates notes B3

Moody's Investors Service said it upgraded American Achievement Group Holding Corp.'s corporate family rating to B3 from Caa1 and probability of default rating to B3 from Caa2 following the successful refinancing of the company's capital structure.

Moody's also said it assigned a B3 (LGD 4, 57%) rating to American Achievement Corp.'s $365 million of 10 7/8% senior secured notes.

The upgrade concludes a review that began in October. The outlook is stable.

Given the changes to American Achievement's capital structure, the ratings are transferred from America Achievement Group Holdings to American Achievement Corp., the agency said.

The new capital structure extends the company's maturity profile to 2015 and provides good covenant protection, Moody's said.

The ratings also reflect its small scale, still high leverage, modest interest coverage and the potential for limited free cash flow over the next 18 months, the agency said.

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