Moody’s lowers Armor, loans

Moody's Investors Service said it downgraded the corporate family rating for Armor Holdco, Inc. to Caa1 from B3.

The agency also downgraded Armor's senior secured first-lien term loan to B3 from B2 and senior secured second-lien term loan to Caa2 from Caa1.

The outlook is stable.

Moody’s said the corporate family rating downgrade results from the company delivering weaker-than-expected credit metrics that will be negatively impacted by its announced acquisition of DF King.

Anticipated improvements in the company's leverage profile have not come to fruition as the company has not paid down debt or grown cash flow. Armor is now taking on more debt with the DF King acquisition, thereby increasing leverage.

The Caa1 rating also reflects the firm continuing to report losses and its exposure to future refinancing risks.

Moody’s said the B3 rating assigned to the first-lien facilities reflects the priority of their position within Armor's capital structure. The Caa2 rating assigned to the second-lien term loan is based on these creditors' secondary claim on Armor's assets that would limit recoveries in a liquidation scenario compared to the first-lien facilities.

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