Moody’s applies Baa3 to Newell Rubbermaid notes

Moody's Investors Service said it assigned Baa3 ratings to $850 million of senior unsecured notes issued by Newell Rubbermaid Inc.

Proceeds will be used to (a) redeem the $250, million notes due 2015 and the remaining $20.7 million notes due 2019; (b) purchase the 2020 notes under the 2020 note tender offer; (c) reduce commercial paper borrowings; (d) reduce amounts outstanding under the accounts receivables financing facility; and (e) for general corporate purposes, which may include additions to working capital and possible acquisitions.

"The issuance will temporarily increase debt/EBITDA to around 3.25 times, but we think leverage will be in the neighborhood of 3 times for the next year or so as the company repays debt with free cash flow and EBITDA increases," Moody’s senior credit officer Kevin Cassidy said in a news release.

Positive rating momentum will build over the medium-term if the company can sustain the improvements in its operating performance and credit metrics, the agency said.

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