Moody's rates Simmons loans B2, ups view to positive

Moody's Investors Service said it assigned a B2 rating to Simmons Co.'s new senior secured credit facility - which includes a $492 million senior secured term loan D due 2011 and $75 million senior secured term loan B due 2011 - and affirmed the company's B2 corporate family rating, Caa2 $165 million secured discount notes due 2014 and Caa1 $200 million senior subordinated notes due 2014.

The outlook was revised to positive from stable based on the company's improved operating performance and improved financial flexibility and Moody's belief that the company is in a better position to weather the current uncertainty in consumer spending because of its improved free cash flow and operating margins following the streamlining of its manufacturing facilities and its marketing and distribution functions.

The positive outlook also reflects Moody's expectation that the industry's strong growth dynamics will materially continue over the next 12 to 18 months, despite the uncertainty in consumer spending, and that Simmons will generate sufficient cash flow to allow for continued deleveraging based on its strong operating and competitive position.

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