Moody's downgrades American Seafoods

Moody's Investors Service said it downgraded American Seafoods Group LLC's corporate family rating to Caa1 from B3; probability of default rating to Caa1-PD from B3-PD; $85 million senior secured revolving credit facility due 2016, $100 million senior secured term loan A due March 2016 and $282 million senior secured term loan B due March 2018 to B1 (LGD2, 21%) from Ba3 (LGD2, 22%); and $275 million senior subordinated notes due May 2016 to Caa2 (LGD5, 70%) from Caa1 (LGD5, 72%). The outlook is maintained at stable

The agency said the downgrade is primarily the result of continued deterioration in the company's credit metrics and Moody's expectation that deleveraging will be more gradual going forward. Also, liquidity is adequate but remains constrained by limited revolver availability, Moody's said.

The stable outlook reflects Moody's expectation that American Seafoods will grow revenues and EBITDA moderately over the intermediate term (based on at-sea business only), which the agency said will drive free cash flow generation that can be used for debt repayment, though this will likely be offset by accretion in the company's senior notes.

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