Remington's Credit Rating Downgraded by Moody's

Nathan S
by Nathan S

Moody’s Investor Services, a division of the ratings company, has downgraded the Remington Outdoors Company CFR to Caa1, with a “stable outlook” (meaning they do not think the credit rating will change). According to Moody’s documentation Caa1 is the first class of Caa, where “obligations rated Caa are judged to be of poor standing and are subject to very high credit risk.” This Caa1 rating is slightly above the “Ca” rating which is a “highly speculative” and “near default” investment.

In other words, they are saying don’t invest your money in Remington unless you are willing to take significant risk.

Looking outside the financials (where Remington has a $580 million secured term loan due in April 2019 and a further $250 million due in May of 2020), Big Green has not been on solid footing. The company is in the middle of moving and consolidating most of its manufacturing to Huntsville, Alabama.

Further, it is plagued in multiple “recalls” (which may not be called a “recall” on a few of their flagship products, including the Remington 700 bolt-action rifle.

With revenue forecasts being steady at a time where other large publicly traded companies such as Smith & Wesson and Ruger are showing stead, if slow, growth, Moody’s mood is rather dour.

The full report and detailed rationale can be found at Moody’s original announcement.

Nathan S
Nathan S

One of TFB's resident Jarheads, Nathan now works within the firearms industry. A consecutive Marine rifle and pistol expert, he enjoys local 3-gun, NFA, gunsmithing, MSR's, & high-speed gear. Nathan has traveled to over 30 countries working with US DoD & foreign MoDs.The above post is my opinion and does not reflect the views of any company or organization.

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  • Ben Loong Ben Loong on Dec 23, 2015

    One news story that I'm surprised was never picked up here: earlier this year Remington got in a bit of hot water with its big M4A1 contract for the Philippine military.

    As it turned out, when the first few thousand of the carbines were delivered, some troops were noticing some problems with accuracy at range. When army TRADOC and the government arsenal did some tests, they found that the rear iron sights on all 30 of the test units wouldn't hold zero due to loose moving parts.

    Needless to say the military was quick to call up Remington regarding the warranty and gave them three months to fix their mistake. In the end, Remington apparently had to fix more than 20,000 units of the 44,000 that had been delivered already.

  • Budogunner Budogunner on Dec 24, 2015

    Remington had been on my boycott list since I had professional dealings with them through another Freedom Group Company that Remington held the purse strings to. I saw the writing on the wall, sold my PSS while people still thought it was a prestigious model, and have been fine with my Savage ever since.