Moody's cuts Springs Window

Moody's Investors Service said it lowered Springs Window Fashions, LLC's corporate family rating to B2 from B1, the probability-of-default rating to B3 from B2 and $100 million senior secured revolver due 2010 and $311 million senior secured term loan B due 2012 to B2 (LGD3, 33%) from B1 (LGD3, 34%).

The outlook is stable.

The downgrades follow third-quarter 2007 results that were significantly below expectations and Moody's concerns about the company's ability to comply with financial covenants once permitted levels tighten in 2008, according to the agency.

Weakness in the U.S. housing market and general economic slowdown has caused a decline in consumer demand for window coverings, Moody's said.

The maximum leverage covenant under the senior secured credit agreement steps down from its current level of 5 times to 4.75 times at June 30 and then to 4.5 times as of Sept. 30. Moody's said it believes Springs may need to seek covenant relief from its bank group.

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