Fitch rates HRG notes BB-

Fitch Ratings said it expects to assign a rating of BB- with recovery rating of RR2 to HRG Group, Inc.’s proposed $100 million senior secured notes due in January 2019.

The notes are expected to have the same terms as the company’s existing secured debt, Fitch said.

The proposed debt issuance does not affect HRG’s existing long-term issuer default rating of B, existing senior secured debt rating of BB- with recovery rating of RR2 or its existing senior unsecured debt rating of B with recovery rating of RR4, Fitch said.

The proceeds from the proposed issuance will be used for general corporate purposes, including financing future acquisitions by HRG or its subsidiaries, the agency said.

The ratings reflect the limited impact of the proposed issuance on HRG’s leverage, unsecured funding profile as a percent of total funding, and recovery prospects for secured and unsecured debt classes, Fitch said.

The equalization of the expected secured debt rating with the existing secured debt reflects the fact that the notes are expected to rank pari passu with existing secured debt in terms of payment priority, the agency said.

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