Moody's revises Motorsport Aftermarket PDR

Moody's Investors Service said it revised the probability-of-default rating for Motorsport Aftermarket Group, Inc. to Caa2/LD from Caa2, affirmed the corporate family rating at Caa2, affirmed its $180 million senior secured bank credit facilities at B3 and revised the loss-given-default assessment on the facilities to LGD2 (27%) from LGD3 (31%).

The outlook is negative.

The agency said it added the "LD" designation to signify its view of a limited default event on the company's unrated senior subordinated notes due 2016. Moody's believes there has been an exchange of some of the subordinated notes, and it considers the cumulative exchange as a restructuring due to the amount of debt involved, potential non-compliance with financial maintenance covenants and the company's weak credit profile.

The Caa2 corporate family rating continues to reflect Moody's concerns about the sustainability of Motorsport's capital structure amidst a prolonged weak operating environment in the motorcycle industry. The adjusted debt-to-EBITDA ratio was nearly 10 times at Dec. 31.

The agency said the negative outlook reflects its concerns about refinancing debt ahead of maturities starting in 2012.

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