Fitch to rate Levi Strauss loan BB-

Fitch Ratings said it affirmed Levi Strauss & Co.'s issuer default rating at B, $650 million asset-based loan at BB/RR1 and $1.8 billion unsecured notes at BB-/RR2. The agency also expects to rate Levi's new senior unsecured term loan BB-/RR2.

The outlook is positive.

The affirmation follows Levi's announcement that it has entered into a binding agreement for a new $325 million seven-year senior unsecured term loan facility with Banc of America Securities and Goldman Sachs Credit Partners LP. The proceeds from the new term loan, combined with $69 million of cash on hand, will be used to redeem the company's $380 million floating-rate notes due 2012 and pay related fees. The floating-rate notes become callable on April 1 at 102% of par. The agency said this transaction will reduce Levi's debt maturities in 2012 and the company's annual interest expense.

The ratings reflect Levi's strengthened credit profile, which resulted from improvements made to streamline its business and focus on product mix and a more premium offering across its operating segments; well-known brand name; geographic diversity; and good liquidity position, Fitch said.

These positives are offset by high debt balances and the competitive operating environment of the denim and casual bottoms market, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.