Moody's cuts Heckler & Koch

Moody's Investors Service said it downgraded Heckler & Koch GmbH's corporate family and probability of default ratings to Caa1 from B3, along with the rating on the company's €120 million senior unsecured notes to Caa1 from B3.

The ratings also have been placed on review with direction uncertain.

The downgrade reflects an increasing risk associated with the refinancing of the company's €120 million notes that mature in July 2011, Moody's said.

There are indications of an aggressive financial policy due to the tight refinancing timeframe and lack of readily available contingency funding plans, along with dividend payouts of about €16 million in 2010, Moody's said.

But the agency said it continues to acknowledge the solid operating performance of the company as observed over the last years.

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