Moody’s rates Outerstuff loan Caa3

Moody’s Investors Service said it gave a Caa3 rating to Outerstuff LLC’s senior secured term loan due December 2023.

“The Caa3 rating assigned to Outesrtuff’s senior secured term loan reflects its junior position to the $100 million ABL. The term loan benefits from a first lien on substantially all of the company’s tangible and intangible assets except the ABL collateral, in which the term loan has a second priority interest. The term loan and ABL are guaranteed by the parent and all wholly-owned subsidiaries,” Moody’s said in a press release.

Simultaneously, Moody’s upgraded Outerstuff’s corporate family rating to Caa2 from Ca and probability of default rating to Caa2-PD from Ca-PD/LD.

“The upgrade reflects Outerstuff’s improved liquidity following the October 2020 amendment to its senior secured term loan,” Moody’s said. As part of the amendment, Outerstuff extended the maturity of its senior secured term loan to Dec. 31, 2023 from July 28, 2021, and repaid all principal and interest that was due through September.

“As a result of the successful maturity extension and resolution of the missed payments, Moody’s removed the limited default (/LD) indicator from the Ca-PD/LD PDR,” the agency said.

The agency also changed the outlook to positive from negative. The outlook reflects the potential for operating improvement in 2021 through the successful renegotiation of sports league contracts, improved apparel retail business conditions, the continued ramp up of new license contracts and benefits of recent cost savings actions, Moody’s said.

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