Moody's rates Southern States notes B2

Moody's Investors Service said it assigned a B2 rating on Southern States Cooperative, Inc.'s proposed $130 million second-lien notes due 2021.

The B3 rating on the proposed $130 million unsecured notes was withdrawn.

Moody's also affirmed the company's B1 corporate family rating, B1-PD probability of default rating and SGL-3 speculative grade liquidity rating.

The outlook remains negative.

Proceeds from the proposed offering will be used to refinance Southern States' $130 million senior unsecured notes due 2015 and pay related fees and expenses.

Moody's said the B2 rating assigned to the proposed notes reflects the second-lien position on substantially all assets of the company. While subordinated to the first-lien position of the $300 million secured asset based credit facility, the proposed second-lien notes benefit from the sizeable level of junior claims in the capital structure in the form of unsecured multiemployer pension liabilities, trade payables and lease rejection claims in a default scenario, the agency said.

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