Moody's may cut KIK

Moody's Investors Service said it placed KIK Custom Products, Inc.'s ratings, including its B2 corporate family rating, under review for possible downgrade as a result of its concerns regarding the highly competitive market for bleach following a new entrant into the market.

Notably, bleach comprises 20% of KIK's revenues, the agency said, adding that the review will focus on KIK's ability to service its very high debt burden with cash flow constrained by both competitive pricing pressure as well as the high cost of raw materials.

In addition, the review will consider the potential long term impairment to value versus the $725 million purchase price, Moody's noted.

The agency said that the following ratings are on review for possible downgrade: $55 million senior secured revolving credit facility due 2013, B1 (LGD3, 32%), $410 million first-lien senior secured term loan due 2014, B1 (LGD3, 32%) and $235 million second-lien senior secured term loan due 2014, Caa1 (LGD5, 81%).

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