Moody's lowers Coach America

Moody's Investors Service said it downgraded Coach America Holdings, Inc.'s corporate family and probability-of-default ratings to B3 from B2, senior secured first-lien rating to B2 from B1 and senior secured second-lien rating to Caa2 from Caa1.

The outlook is negative.

Moody's said the downgrades were prompted by the weak operating results recorded since the acquisition closed.

The B3 corporate family rating reflects high leverage and weak EBIT-to-interest coverage from the recent poor operating results, the agency said.

Moody's said it believes, however, that the new management team has identified actions to reverse the recent operating performance and strengthen credit metrics above the current weak levels.

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