Moody’s downgrades Vista

Moody's Investors Service said it downgraded Vista Outdoor Inc.’s corporate family rating to Ba3 from Ba2, probability of default rating to Ba3-PD from Ba2-PD and $350 million senior notes to B2 (LGD5) from B1 (LGD5). The SGL-2 speculative-grade liquidity rating is affirmed. The outlook remains negative.

The agency said the downgrade reflects Vista's weak operating performance, its deteriorating credit metrics and Moody's view that they will remain weak for an extended period.

The negative look reflects the uncertainty over when gun and ammunition demand trends will stabilize and when Vista's operating performance will improve, Moody’s said.

The agency said Vista Outdoor's Ba3 corporate family rating reflects its good size for its product niche, strong brand recognition and solid market share in ammunition and outdoor products.

The rating is constrained by the company's weak operating performance and the regulatory uncertainty surrounding the gun industry. Moody’s said that because of this uncertainty, Vista's credit metrics need to be stronger than other similarly rated consumer durable companies.

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