Moody's drops Safilo

Moody's Investors Service said it has downgraded Safilo SpA's corporate family rating to B1 from Ba3 and the senior unsecured rating on the €195 million notes due 2013 issued by Safilo Capital International SA to B3 from B2, reflecting weakening market conditions and Moody's concerns about their potential impact on the company's credit profile.

The outlook is negative.

"The rating action reflects Moody's expectation that the luxury eyewear market is likely to endure a period of soft demand that might result in Safilo's credit metrics remaining below levels previously anticipated for longer than expected," explained Paolo Leschiutta, vice president at Moody's and lead analyst for Safilo.

"At the same time, Safilo's liquidity profile remains vulnerable and cash flow generation during the year is expected to remain modest given market conditions and the company's acquisition and dividend payments earlier in the year."

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