Moody's downgrades Vi-Jon revolver to B2, rates term loan B2

Moody's Investors Service said it assigned a B2 (LGD3, 35%) rating to Vi-Jon, Inc.'s (formerly VJCS Acquisition, Inc.) new $210 million senior secured tranche B term loan credit facility due 2014, downgraded the $30 million senior secured revolving credit facility due 2013 to B2 (LGD3, 35%) from B1 (LGD3, 38%) and affirmed the corporate family and probability-of-default ratings at B2.

The outlook was changed to positive from stable.

Proceeds from the term loan will be used to refinance the company's $153 million term loan B and $55 million senior subordinated loans.

The agency said the positive outlook reflects the early integration success that Vi-Jon has achieved since completing its July 2006 merger with Cumberland Swan and the company's continued stable operating performance and market position.

Vi-Jon's B2 corporate family rating is constrained by the company's small relative scale, its reliance on a few key customers for more than 60% of its revenue and its relatively short history as a unified company, Moody's said, adding that the downgrade of the revolver reflects the higher proportion of senior secured debt in the company's capital structure.

The ratings are supported by the prospect for growth in the private-label personal care category given the company's long-standing relationships with key retailers, its strong operational and manufacturing capabilities and its proven management track record, the agency said.

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