Moody's adjusts Quiksilver debt ratings

Moody's Investors Service cuts 1 rating on Quiksilver, upgrades another rating

• On 5:12 pm EDT, Wednesday October 7, 2009

NEW YORK (AP) -- Credit-rating agency Moody's Investors Service said Wednesday it lowered its rating on a piece of sports and skateware maker Quiksilver's debt because the company refinanced some of its European assets.

Moody's cut Quiksilver's senior unsecured notes rating one notch to "Caa2" from "Caa1." both are highly speculative ratings that indicate the notes are below investment grade or "junk bonds."

The cut stems from Quiksilver's granting of liens over a "substantial" part of its European assets to secure $318 million in new European credit facilities.

"As a result, recovery prospects are now weaker for the senior unsecured noteholders in a default scenario," Moody's said in a statement.

Still, Moody's upgraded Quiksilver's speculative grade liquidity one notch to "SGL-3 from "SGL-4."

That is due to the closing of the new credit facilities in Europe, which, coupled with other recent loans, has "significantly extended the company's debt maturity profile and providing higher levels of committed longer term availability," Moody's said in a statement.

Shares rose 6 cents, or 2.4 percent, to close at $2.58 before the release of the ratings.