Moody's cuts Fleetwood to B3

Moody's Investors Service said it lowered Fleetwood Enterprises, Inc.'s corporate family rating to B3 from B2 and affirmed the company's Caa3 $160 million trust preferred securities due 2028.

The outlook is negative.

The downgrade reflects Moody's expectation that demand in Fleetwood's recreational vehicle and manufactured housing markets will remain weak through 2006 and that the resulting credit metrics will weaken from the levels achieved during fiscal 2006 ended in April. Fleetwood's RV business will continue to be pressured by high fuel prices, while the manufactured housing operations will be burdened by the lack of sufficient funding sources for retail customers, more stringent credit standards when retail funding is available and competition from the stock of repossessed units. Demand in both sectors is expected to be further weakened by high interest rates.

The affirmation of the Caa3 preferred stock rating reflects benefits accruing from the company's $60 million issuance of common equity, which increased the amount of capital junior debt to the preferred debt and allowed the company to become current on its previously deferred preferred dividend payment.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.