Moody's gives B2 to Charming Charlie loan

Moody's Investors Service said it assigned a B2 corporate family rating to Charming Charlie Inc. and a B2 rating to the company's proposed $150 million senior secured term loan.

The outlook is stable.

Proceeds from the proposed term, loan along with new preferred equity from private equity firm TSG Consumer Partners, will be used primarily to repurchase certain existing preferred equity interests from private equity firm Hancock Park Associates, reducing its ownership in Charming Charlie to about 20%. The remaining preferred equity interests of Hancock Park will be converted into common stock. Upon completion of the transaction, Charming Charlie will be majority owned by its founder and CEO.

Moody's said the B2 rating assigned to the company's proposed senior secured term loan reflects its first-lien on substantially all of the company's assets, except cash, inventory and receivables, under which it has a second-lien behind the proposed $35 asset-based revolving credit facility. The term loan comprises all funded debt in the capital structure.

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