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Steinway Musical Instruments Downgraded by Moody’s

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On December 22, 2016, Moody’s Investors Service downgraded Steinway Musical Instruments, Inc.’s corporate family rating to Caa1 from B2, probability of default rating to Caa1-PD from B2-PD and $300 million first lien senior secured term loan due 2019 to Caa1 from B2 due to the Company’s weak operating performance and the risk that metrics will remain soft for an extended period. “Leverage, measured as debt/EBITDA, is high at over 8 times,” said Kevin Cassidy, Senior Credit Officer at Moody’s Investors Service. Moody’s believes that unless the Company’s operating performance significantly improves, there is a risk that leverage will remain above 7 times as the Company attempts to refinance its ABL revolving credit facility and its $300 million term loan. “We think that the company will need to seek covenant relief again as it did in September 2016,” noted Cassidy. “This could come through another equity cure by its owner, Paulson & Co. Inc., or a covenant amendment.” Read more on distressed companies.

The post Steinway Musical Instruments Downgraded by Moody’s appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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