Moody’s rates Scotts Miracle-Gro notes B1

Moody's Investors Service said it assigned a B1 rating to Scotts Miracle-Gro Co.’s $250 million senior unsecured notes offering.

Net proceeds will be used to reduce borrowings under the company’s $1.6 billion senior secured revolving credit facility. About $300 million of revolver borrowings will remain outstanding after the offering.

Moody’s said the Ba2 corporate family rating reflects Scotts' strong market position within the fragmented lawn and garden industry, solid credit metrics with debt/EBITDA around 3 times, long-standing customer relationships and commitment to brand support and product development.

The agency recognizes the long-term favorable growth trends for lawn and garden products driven by favorable demographic and macro-economic trends, including the recovery of the housing market.

The B1 rating on the senior unsecured notes is two notches lower than the Ba2 corporate family rating, reflecting its effective subordination to the unrated $1.9 billion senior secured credit facility.

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