Moody’s upgrades Michaels, notes

Moody's Investors Service said it upgraded Michaels FinCo Holdings, LLC's corporate family rating to B1 from B2 to reflect the successful completion of the company's refinancing and debt reduction using proceeds from its recent initial public offering.

At the same time, the agency upgraded the company's probability of default rating to B1-PD and the rating on its PIK toggle notes due 2018 to B3 from Caa1.

Concurrently, the rating on Michaels Stores, Inc.'s 5 7/8% subordinated notes due 2020 was upgraded to B3 from Caa1, and the Ba3 rating on its senior secured term loan due 2020 was affirmed.

The outlook is stable.

Moody’s said the upgrade of Michaels' reflects its successful IPO and subsequent use of net proceeds to pay down debt, as well as the significant additional pro forma cash interest savings stemming from the refinancing of Michaels Stores' $1 billion 7¾% unsecured notes with proceeds from lower cost debt.

The upgrade also reflects Moody's expectation for continued metric improvement over time through a combination of profitable growth and further debt reduction, 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.