Moody's downgrades AMF loans

Moody's Investors Service said it downgraded AMF Bowling Worldwide, Inc.'s proposed first-lien term loan due 2013 and proposed first-lien revolver due 2012 to B1 (LGD3, 33%) from Ba3 (LGD2, 29%) following the upsizing of the first-lien term loan by $35 million to $245 million, which was accompanied by a reduction in the proposed second-lien term loan by $25 million to $80 million and a reduction in the proposed first-lien revolver by $20 million to $40 million.

The agency also affirmed the B2 corporate family and probability-of-default ratings, Ba2 (LGD2, 16%) existing $40 million senior secured revolver and $47 million senior secured term loan due 2009, B3 (LGD5, 72%) existing $124 million 10% subordinated notes due 2010 and Caa1 (LGD5, 82%) proposed $80 million second-lien term loan due 2013.

The outlook is stable.

The proceeds will be used to refinance existing debt, including the 10% notes, to pay a dividend to shareholders and to pay fees and expenses associated with the transaction.

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