Moody's may cut Isle of Capri

Moody's Investors Service said it placed on review for possible downgrade Isle of Capri, Inc.'s B2 corporate family and probability of default ratings, the B1 (LGD3, 37%) ratings on its $375 million senior secured revolving credit facility due 2013 and $821 million senior secured term loan due 2013 and the Caa1 (LGD6, 90%) rating on its 7% $357 million senior subordinated debt due 2014.

The review follows the company's decision to postpone the proposed public offering of 9 million shares of its common stock due to market conditions, Moody's said.

Without the planned equity contribution, the company will not likely be able to reduce and maintain leverage at a level that Moody's said it considers appropriate for a B2 rating given its asset and profitability profile.

The review also acknowledges that the proposed equity offering, assuming it moves forward, does not assure that ratings will not be lowered, the agency added.

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