Moody's lowers Jarden loan, revises outlook

Moody's Investors Service said it affirmed Jarden Corp.'s B1 corporate family and probability-of-default ratings and B3 senior subordinated notes ratings. Moody's downgraded Jarden's senior secured term loan rating to Ba3 (LGD3, 36%) from Ba2, because it was increased by $500 million, through its accordion feature, to $1.475 million.

The agency affirmed the $650 million senior subordinated notes at B3 (LGD5, 80%).

The outlook was revised to positive from developing.

Proceeds from the $500 million expansion of the term loan B, as well as proceeds from the company's proposed new $400 million asset-based revolver (not rated by Moody's) and the company's $300 million accounts receivable securitization program, will be used to fund the cash portion of the acquisition of K2 Inc. including the tender of the $200 million K2 senior unsecured notes.

"The positive rating outlook reflects the progress that Jarden has made integrating various acquisitions over the past three years, which has increased the company's scale of operations and diversification across a number of product categories where it has leading positions," Scott Tuhy, vice president and senior analyst with Moody's, said in a written statement.

The downgrade of the term loan reflects the change in capital mix with increased senior debt of $500 million, without a significant increase in junior capital in the transaction, the agency said.

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