Moody's rates At Home loan B2

Moody's Investors Service said it assigned a B2 (LGD 4) rating to At Home Holding III Inc.'s proposed $425 million senior secured first-lien term loan due 2025.

Moody's also said it affirmed At Home's B1 corporate family rating, B1-PD probability of default rating and SGL-3 speculative grade liquidity rating.

The outlook is stable.

The proceeds from the new term loan will be used to repay the $291 million outstanding amount of the term loan due 2022, pay down $128 million of the $196 million outstanding asset-based revolver borrowings and pay transaction fees, the agency said.

Moody's said it views At Home's leverage-neutral refinancing transaction as modestly credit positive as it frees up revolver availability and pushes the term loan maturity to 2025 from 2022.

But the agency said it expects At Home to remain heavily reliant on its revolver in the future to fund growth capital expenditures for new store openings, which constrains its liquidity profile.

The ratings are constrained by the company's high lease-adjusted leverage of 5.4x and aggressive approach to financing its growth strategy, which results in free cash flow deficits that are supported with significant revolver borrowings and sale leaseback transactions, Moody's said.

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