Remington’s Misfire Draws Moody’s Downgrade Amid Weak Gun Market
(Bloomberg) -- Cerberus Capital Management-backed Remington Outdoor Co. cut to Caa2 from Caa1, with a stable outlook. Operating performance is weak and capital structure is “becoming unsustainable” amid uncertainty about timing of a recovery in the gun market and ability to refinance debt due in less than two years, Moody’s analyst Kevin Cassidy says in a report.
- Rating also reflects narrow focus in firearms, ammunition and related areas, and exposure to raw copper and lead commodity prices
- GUN 7.875% 3rd lien notes due in 2020 (rated lower at Caa3) trading at 70 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority
- NOTE: Co. said in annual report in April it had ~$838.8m of debt at year-end versus net sales of ~$865.1m
- $7.2m of debt maturing this year, $5m in 2018, $564.1m in 2019 and $262.5m in 2020 (see page 72)
- Co. can’t assure it can refinance on “reasonable terms if at all;” may consider asset sales, equity raise, debt restructuring (see page 24)
- Co. representatives didn’t immediately respond to request for comment
To contact the reporter on this story: Molly Smith in New York at msmith604@bloomberg.net To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net Rick Green, Kenneth Pringle
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
Tickers 137482Z US (Cerberus Capital Management LP)
3428753Z US (Remington Outdoor Co Inc)
People Kevin Cassidy (Moody's Corp)
Topics First Word Loans U.S.
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