S&P cuts Heckler & Koch

Standard & Poor's said it lowered its long-term corporate credit rating on Heckler & Koch GmbH to CCC from CCC+. The outlook is negative.

At the same time, the agency said it lowered the issue rating on Heckler & Koch's €295 million 9½% senior secured notes due 2018 to CCC from CCC+. The recovery rating on this instrument is unchanged at 4.

S&P said the downgrade reflects its assessment that Heckler & Koch's liquidity profile has deteriorated to "weak" from "less than adequate" under S&P's criteria. This is primarily due to higher working capital investments caused by product delivery delays, in turn caused by export license delays, and higher cash interest after the group's recent refinancing, the agency said.

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