Moody's cuts Wornick to D

Moody's Investors Service said it lowered the probability of default and long-term rating of The Wornick Co.'s to D from Ca and affirmed its Ca corporate family rating and senior notes (LGD4, 52%). The company's speculative grade liquidity rating of SLG-4 has not been affected.

The outlook has been changed to developing from negative.

The downgrade reflects Wornick's announcement that it has not made about $7 million of interest payments on its 10.875% senior notes due 2011 and has entered into a forbearance agreement with about 80% of its noteholders, Fitch said. The company also said it entered into a forbearance agreement with lenders under its senior secured credit facilities, which essentially comprises the balance of Wornick's debt.

Moody's said it believes it is likely the forbearance period will end with events of default, citing the formation of a noteholders group to discuss strategic alternatives with the company, including capital restructuring.

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