Moody's may cut Coach America

Moody's Investors Service said it placed the B3 corporate family rating of Coach America Holdings, Inc. under review for possible downgrade, along with its probability of default rating of B3, the B2 (LGD3, 40%) rating assigned to its $30 million guaranteed first-lien revolving credit facility due 2013, $50 million guaranteed first-lien letter of credit facility due 2014, $195 million guaranteed first-lien term loan due 2014 and $50 million guaranteed first-lien delayed draw term loan due 2014 and the Caa2 (LGD 5, 88%) rating assigned to its $55 million guaranteed second-lien term loan due 2014.

The review was prompted by liquidity challenges due to contractual tightening of financial ratio covenants, Moody's said.

Moreover, the company's performance, in the context of prolonged United States economic softness, will likely be poorer than expected, the agency said.

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