Moody's drops Truvo to Caa2

Moody's Investors Service said it downgraded the corporate family rating of Truvo Subsidiary Corp. to Caa2 from B3 and the probability-of-default rating to Caa1 from B3.

The agency also downgraded the ratings of the €395 million and $200 million senior notes due 2014 to Caa3 from Caa2.

The outlook is negative.

Moody's said the downgrade reflects increasing concerns about the deteriorating trend in the group's operating environment and the resulting potential impact on its financial risk profile, together with the agency's re-evaluation of the potential recovery prospects for debt holders in the case of distress.

The downgrade also reflects concerns about the company's capital structure, which Moody's said it considers unsustainable.

The Caa2 corporate family rating incorporates expectations of below-average family recovery, which reflects consideration of potential post-default valuations, the agency said.

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