Moody's cuts Ames True Temper

Moody's Investors Service said it downgraded Ames True Temper, Inc.'s corporate family rating to Caa1 from B3, $150 million floating-rate senior notes to Caa2 from Caa1 and $150 million senior subordinated notes to Caa3 from Caa2. The company's SGL-3 speculative grade liquidity rating was confirmed.

The outlook is stable.

Moody's said the downgrade reflects Ames' continuing modest operating performance and high leverage following the recent debt-financed acquisitions of Union Tools and Hound Dog. The company's operating performance degradation has been caused by continuing high raw material prices, which the company has not been able to fully recapture through price increases and a slowdown in consumer spending, neither of which is expected to materially change in the near term.

The company's ratings are supported by its leading brand names and its competitive market share position in the lawn/garden industry through its relationships with the "big box" home-center retailers, the agency noted.

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