Moody's downgrades Harlan Labs

Moody's Investors Service said it downgraded the corporate family rating and probability of default rating of Harlan Laboratories, Inc. to B3 from B2, along with its first-lien revolving credit facility due 2013 to B3, LGD-3, 44% from B2, LGD-3, 45% and its first-lien term loan due 2014 to B3, LGD-3, 44% from B2, LGD-3, 45%. The agency also downgraded Harlan Netherlands BV's first-lien euro revolving credit facility due 2013 to B3, LGD-3, 44% from B2, LGD-3, 45%.

The outlook was revised to negative from stable.

The downgrade reflects weaker leverage and interest coverage metrics than previously anticipated due to restated 2008 and 2009 financials that resulted in a significant reduction to trailing 12-month EBITDA, Moody's said.

The downgrade also reflects a weaker than expected liquidity profile characterized by meaningfully reduced cushion under the company's financial covenant and cash flow that continues to be below expectations, the agency said.

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