Moody's drops Fleetwood Enterprises to junk

Moody's Investors Service said it lowered the corporate family rating of Fleetwood Enterprises, Inc. to Caa1 from B3.

Moody's said it also lowered the rating of the company's $160 million of trust preferred securities to Caa3 LGD5, 86 from Caa2 LGD5, 86.

The outlook is negative and the probability of default is Caa1.

According to the agency, the downgrade and negative outlook reflect the risk that Fleetwood's already weak operating performance, cash generation and credit metrics could be further stressed by the downturn in the U.S. economy.

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