NEW YORK (AP) -- Moody's Investors Service on Friday downgraded some of American Greetings' credit ratings due to its deal to take the company private.
In April, the greeting card company agreed to be taken private by a group led by some of its top executives, including Chairman Morry Weiss and CEO Zev Weiss. The deal values the company at about $580 million, or $878 million including assumed debt and the settlement of some stock options.
Moody's had put American Greetings Corp.'s rating on review for a possible downgrade in September.
The ratings agency reduced the company's corporate family rating further into junk status, to "B1" from "Ba1." It also cut its probability of default rating to "B1-PD" from "Ba1-PD." In addition, the $225 million senior unsecured notes were reduced to "B3" from "Ba2," four notches lower in junk status. Its $400 million secured revolving credit facility went to junk status "Ba2" from investment grade "Baa3."
It maintained the "SGL2" speculative grade liquidity rating.
Moody's kept its outlook on the Cleveland company at stable.
Moody's actions come more than a month after Standard & Poor's Ratings Services lowered its rating on American Greetings deeper into "junk" territory because of the amount of debt involved in the buyout.
Shares of American Greetings shed 1 cent to $18.42 in afternoon trading on Friday.
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