Moody’s rates Hudson's Bay loan B1

Moody's Investors Service said it assigned a B1 rating to Hudson's Bay Co.’s proposed $1,085,000,000 senior secured term loan B due 2022.

Proceeds, as well as from committed financing of about $1,265,000 of non-recourse real estate financing to be raised in a JV between HBC and Simon Properties, will be used to fund the purchase of Galeria Holdings (Kaufhof) from Metro AG for about €2.42 billion.

All other ratings, including the B1 corporate family rating, were affirmed.

The outlook remains stable.

Moody’s said the B1 rating assigned to the secured term loan B reflect its second-lien position on the company's accounts receivable and inventory and the stock of existing and future subsidiaries (including a pledge of unrestricted real estate subsidiary stock and Hudson's Bay’s JV equity interests). While the stock pledge does not afford similar rights as a mortgage, the agency believes there is considerable value in Hudson's Bay’s real estate portfolio such that the stock pledge provides meaningful value to the lenders.

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