Moody's upgrades Easton-Bell

Moody's Investors Service said it upgraded Easton Bell Sports, Inc.'s corporate family and probability-of-default ratings to B2 from B3 because of the company's positive revenue trends and improved operating performance in 2010.

The agency upgraded the $350 million senior secured notes to B2 (LGD4, 69%) from B3 (LGD4, 57%) and the speculative grade liquidity rating to SGL-2 from SGL-3.

The outlook is stable.

Moody's said the upgrade in Easton Bell's corporate family rating reflects its positive revenue trend over the past year driven by increased consumer demand for moderately priced sporting goods and new product launches.

At the same time, cost rationalization efforts implemented over the last couple of years are benefiting the company's operating leverage, the agency noted.

"As you would expect, the combination of these items is resulting in improved credit metrics," Kevin Cassidy, a senior credit officer at Moody's, said in a statement.

"For example, financial leverage has come down by about a half a turn to 6.5x from the end of 2009 and Moody's expects leverage to decrease below 6x by the end of 2010," Cassidy added. Financial leverage includes the debt at Easton's parent.

© 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.