Moody's cuts K&F Industries, rates loans, notes B2, Caa1

Moody's Investors Service said it downgraded the senior implied rating of K&F Industries Inc. to B2 from B1 and assigned ratings to the company's proposed senior secured credit facilities and senior subordinated notes. The outlook is stable.

Moody's also downgraded K&F's unsecured issuer rating to B3 from B2 and assigned a prospective B2 rating to its $50 million senior secured revolving credit facilities due 2010 and $430 million senior secured term loan B due 2012 and prospective Caa1 to its $365 million senior subordinated notes due 2014.

Moody's said the downgrade reflects Moody's view that this recapitalization will result in K&F operating with a much more aggressively leveraged capital structure than in the past.

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