Moody’s raises Hostess to B1

Moody's Investors Service said it upgraded Hostess Holdco, LLC’s and subsidiaries’ corporate family rating to B1 from B2 and probability of default rating to B1-PD from B2-PD.

The agency also affirmed the B1 ratings assigned to Hostess' $100 million first-lien revolving credit facility and $918 million first-lien term loan.

The outlook is stable.

Moody’s said the upgrades follow the completion of the previously announced planned acquisition of Hostess by Gores Holdings, a special purpose acquisition company.

The transaction, which closed on Nov. 4, resulted in a $217 million repayment of Hostess' $300 million second-lien term loan through the use of a portion of cash equity proceeds raised from Gores investors.

The remaining second-lien loans will be repaid using proceeds from $83 million of incremental first-lien term loans being offered to investors.

Upon closing of the incremental financing, expected later this month, the Caa1 second-lien term loan rating will be withdrawn, the agency added.

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