Moody's cuts Atlantic Marine

Moody's Investors Service said it downgraded the corporate family rating of Atlantic Marine Holding Co. to B2 from B1 and changed the outlook to stable from negative.

The agency also downgraded the $45 million first-lien revolving credit facility due 2013 to B2 (LGD3, 36%) from B1 (LGD3, 36%) and $185.1 million first-lien term loan due 2014 to B2 (LGD3, 26%) from B1 (LGD3, 36%).

According to the agency, the downgrade reflects lower-than-expected revenue and EBITDA margin for the first half of 2008 combined with the company's small size, dependence on large, critical orders and increased leverage from $130 million of dividends and preferred stock redemptions since the beginning of 2007.

Atlantic Marine's B2 corporate family rating reflects the company's small revenue base, heavy dependence on large ship repair and fabrication contracts, combined with the inherent cyclicality in its sales level, operating margins and cash flow generation, the agency said.

The B2 rating also reflects an expectation for positive near-term demand, in part due to high oil exploration activity, Moody's said.

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