Moody's: At Home unchanged

Moody's Investors Service said the recent announcement by At Home Holding III Inc. that it plans to raise a $50 million incremental term loan – instead of refinancing its $300 million existing term loan with a new $425 million credit facility – is credit negative, but does not impact the company's ratings.

The B2 rating on the previously proposed $425 million term loan due 2025 will be withdrawn, Moody's said.

The proceeds from the $50 million incremental term loan will be used to reduce the company's asset-based revolver borrowings, which stood at $196 million as of July, the agency said.

The action is credit negative because the downsizing of the proposed credit facility leaves At Home with higher revolver borrowings than in the prior proposed structure for funding its ambitious expansion plans, including the increased capital expenditure commitments, Moody's said.

The company is expected continue to generate negative free cash flow for the next two years and remain reliant on external sources of financing, the agency said.

But it has demonstrated a successful track record of profitably growing its store base and financing its expansion with a mix of cash from operations, sale-leaseback transactions and incremental debt, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.