Moody's cuts Berry PD to Ca/LD

Moody's Investors Service said it downgraded Berry Plastics Corp.'s probability-of-default rating to Ca/LD from B3, $265 million senior subordinated notes due 2016 to Ca (LGD5, 71%) from Caa2 (LGD5, 85%) and speculative grade liquidity to SGL-3 from SGL-2.

The outlook was revised to negative.

The corporate family rating was affirmed at B3, $1.2 billion senior secured term loan due in 2015 at B1 (LGD2, 27%), $680 million first-priority senior secured floating-rate notes due 2015 at B1 (LGD2, 27%), $525 million second-priority senior secured notes due 2014 at Caa1 (LGD4, 63%) and $225 million second-priority senior secured notes due in 2014 at Caa1 (LGD4, 63%).

The action follows the company's disclosure that it agreed to repurchase $415 million principal amount of Berry Plastics Group, Inc.'s senior unsecured term loan due 2014 for $134 million. The company expects the transaction to close by the end of fiscal 2009.

The revision of the outlook to negative reflects pro-forma credit metrics that remain weak for the rating category, Moody's said.

The revision also reflects the limited room for negative variance in operating performance afforded by the pro-forma credit metrics, the agency said.

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