Moody’s rates Southern Graphics facilities B1, Caa1

Moody's Investors Service said it affirmed Southern Graphics Inc.'s corporate family rating at B2 and probability of default rating at B2-PD.

Concurrently, the agency assigned a B1 rating to each of the proposed $75 million first-lien revolving credit facility, $480 million first-lien term loan and $80 million first-lien delayed-draw term loan.

Moody's also assigned a Caa1 to the proposed $120 million second-lien term loan.

The outlook was changed to negative from stable.

The new loans are being issued as part of a transaction to refinance existing debt with the delayed draw term loan being put in place to finance potential acquisitions. The refinancing is expected to close in December.

Moody’s said the outlook change reflects the high level of execution risk associated with integrating potentially sizable debt-funded acquisitions while undergoing a cost structure rationalization to realign with current competitive dynamics in a challenging industry environment.

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