Moody's lowers Lazy Days

Moody's Investors Service said it downgraded Lazy Days' R.V. Center, Inc.'s corporate family and probability-of-default ratings to Caa2 from B3 and its 11¾% senior unsecured notes to Caa3 (LGD5, 83%) from Caa1 (LGD5, 76%). The SGL-4 speculative-grade liquidity rating remains unchanged.

The outlook remains negative.

The agency said the downgrade reflects the company's declining operating performance, which has led to weakening financial flexibility. Overall declines in consumer confidence and spending in the United States have led to significant declines in recreational vehicle unit sales, Moody's said, and leverage has increased to excessive levels with no material improvement expected over the next 12 to 18 months.

Liquidity also remains a concern because the company is highly reliant on its floor plan receivables facility to finance working capital, free cash flow is negative and covenant compliance over the next few quarters is tenuous at best, in the agency's view.

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