Moody's reviews Tupperware

Moody's Investors Service said it placed Tupperware Brands Corp.'s Ba1 rating under review for upgrade.

Also on review are the probability-of-default rating of Ba2, $200 million senior secured revolving credit due September 2012 of Baa3 (LGD 2, 19%) and $405 million senior secured term loan A due September 2012 of Baa3 (LGD2, 19%).

The action is based on the company's demonstrated and sustained operational improvements over the past several years despite a weak economy, its strong credit profile and conservative financial policies, according to the agency.

Tupperware's Ba1 corporate family rating is driven by its strong credit metrics, favorable positions in attractive direct selling markets, its portfolio of recognized brand names, excellent geographic diversification and a base of independent sales consultants, the agency said.

The rating reflects the company's moderate scale, relatively narrow product diversification and weaker market share position in the broader consumer product, cosmetics and personal care sectors, the agency noted.

The rating also considers ongoing growth challenges of the direct selling model in mature markets, its exposure to raw materials and currency price volatility, sensitivity to discretionary spending trends, competition from traditional and direct selling vendors, and the potential for future acquisitions to supplement organic growth, Moody's said.

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