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Moody's May Downgrade Ethan Allen Ratings

The Associated Press

NEW YORK (AP) — Moody's Investors Service said Wednesday that it has placed its ratings for Ethan Allen Interiors Inc. on review for possible downgrade following the home furnishings retailer's weak fiscal third-quarter results in late April.

About $200 million in debt instruments are affected by Moody's action.

The ratings under review include Ethan Allen's investment-grade "Baa3" senior unsecured rating. Moody's said the results, which included a 40 percent revenue drop, heightened its concerns about the company's ability to rebound.

Moody's noted that the Danbury, Conn.-based company has terminated its revolving credit facility and is likely to establish an asset-based revolving credit facility. The ratings agency said it believes the company's current liquidity position is "adequate," despite the lack of a facility.

Ethan Allen shares lost $1.31, or 10.8 percent, to $10.81 on Wednesday. The stock has traded between $6.98 and $34.02 during the past 52 weeks.