Moody's: Safilo outlook negative

Moody's Investors Service said it confirmed Safilo SpA's Ba3 corporate family rating and the B2 rating on the senior unsecured €195 million notes due 2013 issued by Safilo Capital International SA and changed the outlook to negative.

The action concludes the review for downgrade that began on Aug. 7, 2008.

"The rating action was prompted by Moody's view that despite the weakening operating performance reported by the company during the current fiscal year-end December 2008 and the expectation that credit metrics will remain weak over the medium term, the company's successful implementation of measures aimed at reducing operating leverage, should able the company to maintain the existing rating," Paolo Leschiutta, Moody's analyst, said in a written statement.

Safilo's Ba3 corporate family rating reflects the leading position of the company, the good business diversification by geographic area and by business segment, and the strong portfolio of brands that compensate for the exposure to the cyclical fashion industry and to the risk of license termination, according to the agency.

For the current financial year, the issuer's adjusted debt-to-EBITDA ratio is likely to exceed 4 times.

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