Jill Acquisition LLC -- Moody's says J. Jill's $85 million add-on to partially fund a sponsor dividend is credit negative; Ratings Unaffected

New York, May 17, 2016 -- Moody's Investors Service ("Moody's") said Jill Acquisition LLC's ("J. Jill") proposed $85 million add-on to its senior secured term loan which will be used to partially fund a $110 million dividend to the company's equity sponsor owners TowerBrook Capital Partners L.P. ("TowerBrook") is credit negative, but does not change the company's B2 Corporate Family Rating ("CFR"), B2 term loan rating, or stable outlook. The dividend will also be funded with approximately $25 million of balance sheet cash at close. Moody's views the transaction as credit negative because it will increase J. Jill's debt and leverage, while the meaningful reduction in cash will weaken near term liquidity. The proposed debt financed dividend also reflects a willingness on the part of the company's private equity ownership to maintain leverage at elevated levels which Moody's views as reflective of an aggressive financial policy.

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