Moody's assigns Sweetwater, loan B2

Moody's Investors Service assigned first-time ratings to Sweetwater Borrower, LLC (Symphony Finance Sub, LLC), including a B2 corporate family rating, B2-PD probability of default rating and B2 ratings on the planned senior secured first-lien revolving credit facility and planned term loan.

"Sweetwater has gained share in the musical retail sector by capitalizing on growing e-commerce penetration and differentiating itself with a high level of service and a personalized selling model," said Moody's analyst Raya Sokolyanska. "While leverage is high pro forma for the investment, we expect the company's good execution capabilities to continue driving solid long-term earnings performance." The rating also considers governance considerations, including risks associated with private equity control.

Proceeds from the $638.5 million term loan, $15 million of borrowings from the $100 million revolver, equity from Providence Equity Partners and rollover equity from the company's founder will be used to finance the investment by Providence Equity Partners and pay for transaction fees and expenses.

The outlook is stable.

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