Moody's downgrades Sealy debt
Earnings below firm's expectations
Larry Thomas -- Furniture Today, January 27, 2009
NEW YORK — Moody's Investors Service has downgraded the debt ratings of Sealy Corp. by one notch because of the bedding producer's weak fourth-quarter earnings.
The rating service said Sealy's fourth-quarter results "were significantly below Moody's expectations." Earlier this month, the mattress sales leader reported a quarterly net loss of $42 million on a 26.2% decline in sales.
"Moody's believes that the deepening recession will continue to strain discretionary consumer spending in 2009, especially in the first half of the year, resulting in continued weak operating performance," said Kevin Cassidy, a Moody's senior credit officer.
Moody's said the downgrade reflects its concern that Sealy won't be able to generate sufficient cash flow to meaningfully reduce its debt.
The new rating for Sealy's first lien credit facility is Ba3, which Moody's defines as having "substantial credit risk." The company's subordinated notes are now rated Caa1, which is defined as having "very high credit risk."
Moody's also lowered Sealy's corporate family rating, which covers all the company's debt, to B2, which is defined as speculative debt "subject to high credit risk."
Moody's said its ratings outlook remains negative.
-
Moody's downgrades DirectBuy
Jan 22, 2012 -
Havertys' same-store sales plummet 22.6% in 4Q
Jan 8, 2009 -
Simmons implements debt agreement
Feb 10, 2009
Featured Company
-
Brandwise Inc.
Brandwise serves a model - not just an industry - by integrating, automating, and optimizing the entire sales channel, from wholesale Suppliers to their Reps and the Retailers they service. In short, our software helps Reps and Suppliers sell more and create... more
VIEW ALL GALLERIES
