Moody's cuts Allied Capital to junk

Moody's Investors Service said it downgraded Allied Capital Corp.'s senior unsecured rating to Ba2 and placed ratings under review for further downgrade.

The downgrade follows Allied's announcement of potential covenant violations in its private notes and revolving credit facility, which could accelerate maturity of these obligations if forbearance is not provided by the lenders under these agreements, according to the agency.

Ratings reflect the company's expertise and scale in private equity investing, diversification and granularity of its investment portfolio, and large equity base as mandated by business development company regulation, the agency said.

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