Moody's drops American Color Graphics notes to Ca

Moody's Investors Service said it affirmed American Color Graphics, Inc. (ACG)'s Caa2 corporate family rating and downgraded the second-lien notes to Ca from Caa3.

The outlook remains negative.

The rating affirmation recognizes a recent moderation in the pace of ACG's top line decline, the results of its ongoing cost-cutting measures, the company's recent success in refinancing its senior secured credit facility and its long-standing customer relationships, Moody's said.

ACG's ratings reflect the company's continuing free cash flow losses, weak fixed charge coverage, high leverage, constrained liquidity and relatively poor asset protection metrics, the agency noted.

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