Moody's cuts Ameriqual

Moody's Investors Service said it downgraded AmeriQual Group, LLC's corporate family and probability-of-default ratings to Caa1 from B3 and senior secured second-lien notes to Caa2 (LGD4, 69%) from Caa1 (LGD4, 66%).

The agency also lowered the speculative grade liquidity rating to SGL-4.

The outlook is developing. This completes the review begun on Aug. 13.

Moody's said the downgrades reflect Ameriqual's weakened credit profile due to the continuing absence of a multi-year contract combined with the upcoming expiration of the company's $35 million revolver in January 2012 and the maturity of its second-lien notes in April 2012.

The lower SGL rating of SGL-4 underscores the upcoming maturities of the company's debt structure over the next thirteen months, the agency added.

The Caa1 rating incorporates the uncertainty regarding the timing of renewal of the multi-year contract as well as the company's small size, high customer concentration and volatility associated with contract revenue, the agency said.

The rating also acknowledges the company's eight-year track record as the incumbent top ready to eat meal provider to the Department of Defense, the agency said.

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