Moody's drops Head to Caa1

Moody's Investors Service said it downgraded the corporate family rating of Head NV to Caa1 from B3, the probability-of-default rating to Caa2 from B3 and the senior unsecured rating on the €135 million notes issued by HTM Sport- und Freizeitgeräte AG due 2014 to Caa2 (LGD4, 50%) from Caa1.

The outlook is stable.

"Today's rating action reflects Moody's view that the company's operating performance is likely to remain subdued beyond fiscal year-end December 2008 due to ongoing pressure on consumer spending across Europe and North America, and structural changes in the winter sport market," Paolo Leschiutta, Moody's analyst, said in a written statement.

The agency said a total debt-to-EBITDA ratio above 9x are not sustainable over the medium term and are not commensurate with a B rating.

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