Moody's rates Merisant loans, notes

Moody's Investors Service said it assigned a prospective B2 rating to Merisant Co.'s proposed senior secured revolving credit facility and term loan, a prospective Caa1 rating to Merisant Worldwide Inc.'s proposed guaranteed senior subordinated note issuances and a prospective B2 senior implied rating.

The outlook is stable.

Proceeds from Merisant's initial public offering of $680 million of Income Deposit Securities securities, $33 million of non-IDS senior subordinated notes and the proposed new term loans will repurchase existing shareholders' equity interests, refinance all of Merisant's existing debt, pay significant transaction expenses and pre-fund $5 million of 2004 capital spending.

Debt levels at closing of the IPO would be slightly higher than current levels and would not amortize, leaving leverage high, at about 5x last 12-month EBITDA.

Merisant's ratings are limited by the company's modest size, largely single product focus, and reliance on a limited number of brands, according to Moody's. Merisant's ratings are supported by the company's high margins, low capital spending needs and strong cash flow generation.

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