Moody's changes Atlantis view to negative

Moody's Investors Service said it changed the outlook for the ratings of Atlantis Plastics, Inc. to negative from stable and affirmed the ratings as follows: B2 corporate family rating, Caa1 rating for the $75 million junior term loan, B2 rating for the $25 million senior secured revolver and B2 rating for the $120 million senior term loan.

The agency said the change of the ratings outlook to negative from stable reflects some deterioration in Atlantis' operating and financial performance during the past few quarters, which has resulted in margin compression, inability to generate positive free cash flow and increased receivables days outstanding and average inventory days.

Key factors that explain the negative trend include increased resin costs accompanied by the inability to pass through a significant part of these costs, a slowing housing market affecting its injection molding business and an inventory correction in the company's plastic films' business.

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