S&P assigns Outerwall notes BB-

Standard & Poor's said it assigned its BB- senior unsecured rating to Outerwall Inc.'s $300 million senior unsecured notes due 2021.

The recovery rating is 6, indicating an expectation for negligible (0-10%) recovery in the event of a default.

The BB+ corporate credit rating remains unchanged and the outlook is stable.

S&P said it expects the company to use proceeds from the proposed notes to refinance borrowings under its secured credit facility. In particular, proceeds will reduce the amount of the term-loan facility to $150 million, from $335 million as of March 31, while the remainder of the proceeds will reduce borrowings under the $600 million revolver.

As such, the agency anticipates total reported debt to be unchanged (about $991 million as of March 31) following this transaction and estimates pro forma debt-to-EBITDA leverage will continue to be about 1.9x for the 12 months ended March 31.

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