Moody's affirms Atlantic Marine, cuts outlook to negative

Moody's Investors Service said it affirmed the ratings of Atlantic Marine Holding Co. and changed the outlook to negative from stable.

The outlook change follows Atlantic Marine's announcement that it will fund a $68.5 million dividend by increasing outstandings under its senior secured term loan to $185 million from $149 million and by drawing cash on hand by $34 million, the agency said.

Affirmed ratings include the company's corporate family rating at B1, probability of default at B2, senior secured revolving credit facility at B1 LGD3, 36% and senior secured term loan at B1 LGD3, 36%, the agency noted.

Moody's said that Atlantic Marine's B1 rating reflects the company's small revenue base, its heavy dependence on large ship repair contracts from the U.S. Government and the inherent volatility in its sales level, operating margins and cash flow generation.

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