S&P cuts Freedom Group, loan

Standard & Poor's said it lowered its corporate credit rating on Freedom Group Inc. to B from B+.

The outlook is negative.

At the same time, the agency lowered its issue-level rating on the company's $575 million senior secured term loan due 2019 (issued by subsidiary FGI Operating Co. LLC) to B from B+. The recovery rating on the term loan remains 3, reflecting an expectation for meaningful (50% to 70%) recovery for lenders in the event of a payment default.

S&P also lowered its issue-level rating on Freedom’s senior secured third-lien notes due 2020 (co-issued by subsidiaries FGI Operating and FGI Finance Inc.) to CCC+ from B-. The recovery rating on these notes remains 6, indicating an expectation for negligible (0% to 10%) recovery for lenders in the event of a payment default.

"The downgrade reflects our lowered EBITDA forecast in 2014 and 2015, resulting in very high total adjusted debt to EBITDA through 2015," S&P credit analyst Shivani Sood said in a news release.

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