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Moody's rates Constellation Brands loan Ba2
Moody's Investors Service said it assigned a Ba2 rating to Constellation Brands, Inc.'s new $3.5 billion secured (stock pledge only) credit facility, which replaced its $2.9 billion secured credit facility.
The $1.3 billion incremental add-on facility, which was proposed at the time of the Vincor International Inc. acquisition announcement, was never executed and the rating has been withdrawn.
Constellation's existing ratings are not affected by these actions and have been affirmed.
The outlook remains negative.
Constellation's ratings remain constrained by its aggressive acquisition strategy, which gives rise to considerable integration and event risk and high pro forma financial leverage.
Offsetting these risks are Constellation's scale and market diversification, its broad portfolio of brands covering the wine, spirits and imported beer categories at all price points, franchise strength and growth potential and solid profitability and efficiency.
Ratings assigned include a Ba2 for the $3.5 billion secured (stock pledge only) bank credit facilities consisting of a $1.2 billion term loan A due June 2011, a $1.8 billion term loan B due June 2013 and a $500 million revolving credit facility due June 2011.
Ratings affirmed include the $200 million 8.625% senior unsecured notes due 2006 at Ba2, the $200 million 8% senior unsecured notes due 2008 at Ba2, the £80 million 8.5% senior unsecured notes due 2009 at Ba2, the £75 million 8.5% senior unsecured notes due 2009 at Ba2, the $250 million 8.125% senior subordinated notes due 2012 at Ba3, the Ba2 corporate family rating and the SGL-2 speculative grade liquidity rating.
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