Moody's rates Outerwall notes Ba3

Moody's Investors Service said it assigned a Ba3 (LGD5, 72%) rating to Outerwall Inc.'s new senior notes due 2021. The company's Ba2 corporate family rating, Ba2-PD probability of default rating and SGL-1 speculative grade liquidity rating are unchanged, and the outlook is stable.

The note proceeds will be used to reduce borrowings under the senior secured credit facility. The company also plans to amend and extend its existing senior secured credit facility in a new five-year deal that includes a $150 million term loan and a $600 million revolver.

The agency said Outerwall's Ba2 corporate family rating reflects its scale and strong market position in the DVD rental business and its leading position (in the United States) in the coin kiosk business.

The rating also incorporates risks associated with the evolution of studio content distribution and consumer content consumption to digital platforms, Moody's said.

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