Moody's downgrades FBI credit rating
By Furniture Today Staff -- Furniture Today, February 25, 2007
New York — Moody's has downgraded its rating on Furniture Brands International's revolving credit line, citing the company's falling operating margins and reduced operating cash flow.
The ratings service assigned a Ba1 rating to the credit line, one notch lower than its previous rating of Baa3.
Moody's noted that sales were especially weak at FBI's Broyhill unit.
"Although some of the company's higher-end brands are not as large as Broyhill, in the past their strength provided a buffer against the operating struggles," said Kevin Cassidy, vice president and senior analyst. "However, with softness now creeping across all brands, Moody's believes there is a risk that the company's operating difficulties will linger."
According to Moody's, debt with any Ba rating is "subject to substantial credit risk."
The lower rating could increase FBI's financing costs, since lenders typically charge higher interest rates to lower-rated debt.
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Moody’s downgrades FBI’s credit
Feb 23, 2007
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