Moody's rates N&B Industries loans B1, Caa1

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to N&B Industries, Inc., B1 (LGD3) ratings to subsidiary Nielsen & Bainbridge, LLC’s $30 million senior secured first-lien revolving credit facility due 2019 and $200 million senior secured first-lien term loan due 2020 and a Caa1 (LGD5) rating to its $90 million senior secured second-lien term loan due 2021. The outlook is stable.

The ratings are being assigned in connection with the proposed acquisition of Home Decor Cos.

The agency said the B2 corporate family rating reflects the company's small scale, high leverage, niche product categories and material execution risk associated with a large acquisition. Moody's expects leverage to decline only modestly, with earnings growth in the low single digits and the modest level of free cash flow being used for acquisitions instead of debt repayment.

The rating also reflects the company's diverse distribution channels and longstanding relationships with large retailers such as Wal-Mart, Target and Michael's Stores, Moody’s said.

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