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Moody's cuts Aftermarket Technology's ratings
Moody's Investors Service said it downgraded the ratings for Aftermarket Technology Corp. in response to the company's announcement of plans to complete up to a $60 million equity repurchase through the use of balance sheet cash.
Moody's downgraded to Ba3 from Ba2 Aftermarket Technology's $192 million of remaining guaranteed senior secured bank credit facilities, which consist of a $50 million revolver due March 2007, $53.8 million remaining term loan A due March 2007, and $88.4 million remaining term loan B due March 2008, and downgraded to Ba3 from Ba2 the company's senior implied rating.
The outlook is stable.
The plans for the proposed equity repurchase coincide with Aftermarket Technology's announcement that it is about to transition to a new chief executive officer.
Moody's said it has concern that these significant capitalization and management changes are proposed at a transitional point for the company's core operations. At a time when Aftermarket Technology has become increasingly focused on growth, the company is also in the process of adjusting to increased competitive pricing pressures and several changes to its business mix.
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