Moody's cuts Quiksilver view to negative

Moody's Investors Service said it revised Quiksilver, Inc.'s outlook to negative from stable and affirmed the company's corporate family and probability-of-default ratings at Ba3, speculative grade liquidity rating at SGL-3 and $400 million senior unsecured notes at Ba3 (LGD4).

The loss-given-default rate assigned to the notes was revised to 59% from 58%.

The agency said the outlook revision reflects its concerns regarding visibility on the recovery of the company's Rossignol ski business following the weak 2006/07 ski season and Quiksilver's negative free cash flow for the last 12 months ended Jan. 31. An inability to generate positive free cash flow in the current fiscal year ending in October could lead to a downgrade, Moody's warned.

Quiksilver's Ba3 corporate family rating is supported by the strong market presence and name recognition of the company's core consumer brands, the global reach of the company and increased product and geographic diversity after the Rossignol acquisition, Moody's said.

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