Research Update: Rodan&Fields, LLC Assigned 'BB-' Corporate Rating, 'BB' Issue-Level Ratings; Outlook Stable

U.S. –based direct seller of premium skincare solutions, Rodan&Fields, LLC (R+F) plans to execute an $800 million senior secured credit facility consisting of a $200 million revolving credit facility and a $600 million term-loan B. The company plans to fund a $600 million dividend to its owners. We estimate pro forma adjusted leverage of about 2.8x. We are assigning our 'BB-' corporate credit rating to the company and a 'BB' issue-level rating to the proposed $800 million secured bank facility. The stable outlook reflects our expectation that the company will continue to grow rapidly from new products and a growing consultants base while at least maintaining current margins. Its EBITDA growth should enable it to reduce leverage to

...+ U.S. ¡based direct seller of premium skincare solutions, Rodan & Fields, LLC (R+F) plans to execute an $800 million senior secured credit facility consisting of a $200 million revolving credit facility and a $600 million term-loan B. + The company plans to fund a $600 million dividend to its owners. We estimate pro forma adjusted leverage of about 2.8x. + We are assigning our '##-' corporate credit rating to the company and a '##' issue-level rating to the proposed $800 million secured bank facility. + The stable outlook reflects our expectation that the company will continue to grow rapidly from new products and a growing consultants base while at least maintaining current margins. Its EBITDA growth should enable it to reduce leverage to the low-2x area within 12 months and generate free cash flow of around $250 million annually....

Research Update