Fitch to rate Spectrum loans BB+

Fitch Ratings said it expects to assign a BB+ rating to Spectrum Brands, Inc.'s two new senior secured term loans totaling about $520 million.

Loan proceeds from a new $250 million term loan to Spectrum as borrower and a new €200 million term loan (roughly $270 million) to a new borrower, Spectrum Brands Europe GmbH (Spectrum-Germany), will be used to refinance the $513 million senior secured term loan B outstanding at Sept. 30, 2013. Spectrum-Germany is a wholly owned subsidiary of Spectrum.

The agency also expects to assigns Spectrum-Germany an issuer default rating of BB-, similar to other cross-guaranteed borrowers in the company's capital structure.

Fitch said Spectrum's rating and stable outlook are supported by its solid track record of improving margins, low single-digit organic growth rates since 2009, ample levels of free cash flow that has been used to reduce debt, and appropriate value-based market strategy which resonates well with challenged consumers in developed markets. Spectrum remains committed to deleveraging and operating in the 2.5x to 3.5x range in the long term.

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