Moody's cuts American Pacific outlook to negative

Moody's Investors Service said it moved American Pacific Corp.'s outlook to negative from stable and the speculative-grade liquidity rating to SGL-3 from SGL-2.

The B1 corporate family rating and probability of default rating as well as the B2 rating on its notes were affirmed, the agency said.

The rating actions reflect Moody's expectations that American Pacific will continue to experience quarterly volatility in its earnings and, as a result, its EBITDA cushion with respect to its revolver financial covenant compliance may decline, according to the agency.

This creates a greater likelihood of American Pacific breaching its revolving credit facility's financial covenants, the agency said.

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