Moody's drops Ethan Allen

Moody's Investors Service said it lowered Ethan Allen Global Inc.'s credit ratings to Ba2 and stabilized the company's rating outlook.

The agency said that the action reflects the decline in debt protection measures due to the impact of the economic recession.

However, the stable outlook reflects our expectation that management actions taken over the past year will lead to improving profitability and operating cash flow over the next several quarters, Moody's said, noting that the company's liquidity position is stable and should continue to improve going forward.

Moody's added that it downgraded the following ratings to Ba2: corporate family rating, probability of default rating and the senior unsecured notes rating. The speculative grade liquidity rating was affirmed at SGL 2.

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