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By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

 

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2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

 

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Related Issuers
Rating Action:

Moody's upgrades Edgewell's CFR to Ba3 following cancelled Harry's acquisition; outlook stable

18 Feb 2020

New York, February 18, 2020 -- Moody's Investors Service ("Moody's") upgraded Edgewell Personal Care Co.'s ('Edgewell') Corporate Family Rating (CFR) to Ba3 from B1 and Probability of Default Rating to Ba3-PD from B1-PD. Concurrently, Moody's upgraded the ratings on Edgewell's senior unsecured notes to Ba3 from B3. Moody's also withdrew the ratings on the company's proposed senior secured credit facility, including the secured revolver and term loans, that were part of the funding for the now cancelled acquisition of Harry's. The rating outlook is stable.

The upgrade reflects Edgewell's much lower leverage position following termination of the company's $1.4 billion acquisition of Harry's after the Federal Trade Commission ("FTC") filed a lawsuit to prevent the transaction. Excluding the acquisition, debt to EBITDA financial leverage will remain at about 3.4x (including Moody's adjustments) for the twelve month period ended December 31, 2019 instead of increasing to roughly 5.7x pro-forma for the Harry's transaction. The upgrade also reflects Moody's expectation that the company will be able to refinance its upcoming debt maturities at a cash interest cost that does not meaningfully affect free cash flow. Moody's believes that the global wet-shave category will continue to face challenges reflecting declining trends in men's shaving, as well as intense competitive pressures from Edgewell's large and diversified peers. The entry of new startup brands will also heighten competition in the segment amid flat to declining global sales. Moody's expects Edgewell's sizable free cash flow-to-debt of 11% provides flexibility to invest in products with better growth prospects and to reduce debt if necessary to maintain debt-to-EBITDA leverage in a 3-4x range if EBITDA pressure persists.

Ratings Upgraded

Edgewell Personal Care Co.:

Corporate Family Rating to Ba3 from B1;

Probability of Default Rating to Ba3-PD from B1- PD;

$500 million Senior Unsecured Notes to Ba3 (LGD4) from B3 (LDG5)

$600 million Senior Unsecured Notes to Ba3 (LGD4) from B3 (LDG5)

Ratings Downgraded:

Speculative Grade Liquidity to SGL-3 from SGL-1

Ratings withdrawn:

Edgewell Personal Care Co.:

$425 million senior Secured Revolving Credit Facility expiring 2024 at Ba2 (LDG 2);

$575 million senior Secured First Lien Term loan A due 2024 at Ba2 (LDG 2);

$600 million senior Secured First Lien Term loan B due 2026 at Ba2 (LDG 2);

The rating outlook is stable.

RATINGS RATIONALE

Edgewell's Ba3 CFR reflects the company's challenging industry operating environment. Edgewell will continue to face intense competition from much larger, well diversified competitors in its wet shave, skin care and feminine care businesses. This will lead to weak earnings growth and debt to EBITDA sustained around 3.8x over the next 12 months. The rating also reflects the company's concentration in mature, highly-promotional categories that present a strategic growth challenge. Moody's believes that the company will continue to utilize cash and debt to fund acquisitions to spur growth and share buy backs. Moody's expects Edgewell's financial strategy to maintain debt-to-EBITDA leverage within a 3.0-3.5x range (based on the company's calculation) will help sustain solid free cash flow. The rating is supported by the company's portfolio of well-known consumer product brands including Schick, Playtex, and Banana Boat. The company also generates good free cash flow.

The stable outlook reflects Moody's expectation that Edgewell will continue to generate flat to negative organic growth in its wet shave category. The stable outlook also reflects the rating agency's expectation that Edgewell will continue to generate solid free cash flow and proactively refinance the 2020 revolver expiration and 2021 and 2022 note maturities at a manageable interest cost.

A downgrade could occur if Edgewell fails to stabilize operating performance, or if liquidity deteriorates. Moody's could also downgrade if debt to EBITDA is sustained above 4.0x. Other factors that could contribute to a downgrade include debt financed acquisitions or share repurchases.

Edgewell's ratings could be upgraded if the company improves its scale and diversification, and it sustains solid organic growth with a stable to higher EBITDA margin. An upgrade would also require improved credit metrics such that Moody's expects debt/EBITDA to be sustained below 3.0x.

The principal methodology used in these ratings was Consumer Packaged Goods Methodology published in February 2020. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

Edgewell Personal Care Co., based in Shelton, CT manufactures, markets and distributes branded personal care products in the wet shave, skin and sun care, feminine care, and infant care categories. The company has a portfolio of over 25 brands and a global footprint in over 50 countries. Edgewell is publicly traded and generates annual revenue of about $2.1 billion.

REGULATORY DISCLOSURES

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

The rating has been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Chedly Louis
VP - Senior Credit Officer
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

John E. Puchalla, CFA
Associate Managing Director
Corporate Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

No Related Data.
© 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE APPLICABLE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND OTHER OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

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MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY550,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​
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