Moody's cuts AMF Bowling

Moody's Investors Service said it lowered AMF Bowling Worldwide, Inc.'s corporate family and probability of default ratings to Caa1 from B3, along with its $40 million first-lien revolving credit facility due 2012 to B2 (LGD 3, 30%) from B1 (LGD 3, 30%) and $227 million first-lien term loan due 2013 to B2 (LGD 3, 30%) from B1 (LGD 3, 30%).

The agency also said it affirmed the Caa2 rating on its $80 million second-lien term loan due 2013 at Caa2 (with its LGD 5, 80% revised from LGD 5, 79%).

The outlook remains negative.

The downgrade was prompted by AMF's ongoing elevated financial leverage and a concern about the company's ability to improve its credit metrics given the soft consumer spending environment, Moody's said.

These issues heighten concern over the company's ability to address pending medium-term debt maturities, the first being the revolving credit facility in June 2012, the agency said.

But the rating derives some support from AMF's ongoing efforts to control costs, Moody's said, and the company's adequate near-term liquidity, supported by a meaningful unrestricted cash balance.

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