Moody's: Spectrum notes B3

Moody's Investors Service said it assigned a B3 rating to Spectrum Brands Inc.'s $275 million senior unsecured notes.

The proceeds will be used to refinance the 12% subordinated notes and the rating on those notes will be withdrawn upon close.

The B1 corporate family and probability of default ratings were affirmed, along with its $275 million senior unsecured notes at B3 (LGD 5, 89%), $950 million senior secured notes at B1 (LGD 3, 46%), $750 million senior secured term loan at B1 (LGD 3, 46%), senior subordinated notes due 2013 at B3 (LGD 5, 89%) and speculative-grade liquidity rating at SGL 2.

The outlook remains stable.

This refinancing is beneficial to the credit profile of Spectrum as it will save about $13 million a year of interest, Moody's said.

The ratings reflect Spectrum's high financial leverage at almost 4.5x and its modest size with revenues of about $3 billion, the agency said.

The ratings are constrained by the company's highly competitive industry, Moody's said.

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