Moody's drops Evenflo

Moody's Investors Service said it lowered WP Evenflo's corporate family and probability of default ratings to B3 from B2 and affirmed the B1 first-lien term loan (LGD3, 32.6%, revised from 36%) and the Caa1 second-lien term loan (LGD5, 76.6%, revised from 83%).

The outlook is stable.

The agency said that the downgrade reflects Evenflo's slower growth and higher costs than had been anticipated when the rating was affirmed following the company's Ameda Breastfeeding Products acquisition in Nov. 2007.

Notably, a product recall and an exceptionally large increase in costs from suppliers during the first half of 2008 negatively impacted Evenflo's financial performance, Moody's said.

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