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Rating Action:

Moody's Upgrades Remington Arms' Ratings

14 May 2007

$200 Million of Long-Term Debt Affected

New York, May 14, 2007 -- Moody's Investors Service upgraded Remington Arms Company, Inc.'s ("Remington") Corporate Family Rating to B2 from B3 and its senior unsecured notes rating to B3 from Caa1. The ratings upgrade reflects the company's strong recent operating performance stemming from favorable demand trends, and the benefits of the company's ammunition price increases and hedging strategies. The upgrade also considers the positive cash flow the company generated in 2006, following several years of negative cash flows, and the prospects for continued modest positive cash flow in 2007. The ratings outlook is stable.

In April 2007, Remington announced that an affiliate of Cerberus Capital Management, L.P. ("Cerberus") planned to purchase the company for $370 million (7.0 times multiple based on EBITDA of $53 million for twelve months ended March 31, 2007). As part of the transaction, Cerberus intends to contribute approximately $118 million of preferred equity that will pay out existing equity holders and repay approximately $47 million of senior notes that are obligations of RACI Holdings, Inc. ("Holdings"), Remington's direct parent. Moody's expects that pro forma leverage metrics (including Moody's standard analytical adjustments) will not materially change from current levels. The transaction is expected to close by the end of June 2007. The ratings are subject to review of final documentation.

Ratings Upgraded:

Corporate Family Rating ("CFR"), to B2 from B3;

Probability-of-default rating, to B2 from B3;

$200 million 10.5% senior unsecured notes due 2011, to B3 (LGD5, 70%) from Caa1 (LGD4, 63%).

Remington's B2 CFR is driven by its high leverage, exposure to volatile raw material costs, the discretionary nature of its products, the highly seasonal nature of the business, continuing regulatory and product liability risks, and the uncertain response of customers' to continued price increases. The rating is supported by the company's long operating history, its leading market positions in key categories (shotguns, rifles, and ammunition), only moderate customer concentration, and its success passing through price increases to date.

On May 1, 2007, Remington initiated a consent solicitation in order to amend certain provision of the senior unsecured notes indenture that would allow the Cerberus acquisition to occur without triggering the change of control provision. The amendment would also allow Cerberus to take the place of the existing sponsors, thus permitting Remington to make certain payments and distributions to Cerberus. The buyer has obtained a financing commitment in the event that lenders require the company to repay the credit agreement and/or the senior unsecured notes are tendered to the company, pursuant to the change of control provision. Cerberus' current intention is to obtain any necessary waivers, amendments, and consents so that the current credit agreement and senior unsecured notes remain outstanding.

The stable outlook reflects Moody's expectation that Remington will sustain the current volume of business and continue to offset the negative impact of rising raw material costs with price increases and hedging, such that debt to EBITDA remains below 6.0 times at fiscal year end (which represents a low point in seasonal borrowings) and EBITA interest coverage is at least 1.2 times (metrics incorporate Moody's standard analytical adjustments). The stable outlook also reflects Moody's expectation that the company will generate modest positive annual free cash flow despite the prospects for material pension contributions over the medium-term.

For additional information, please refer to Moody's Credit Opinion of Remington available on www.moodys.com.

Headquartered in Madison, North Carolina, Remington Arms Company, Inc. designs, manufactures, and markets rifles, shotguns, ammunition, and hunting and gun care accessories under the Remington name. The company's products are sold through independent dealers, Wal-Mart, and sporting goods retailers. The company reported sales of $452 million for the twelve months ended March 31, 2007.

New York
Andris G. Kalnins
Senior Vice President
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Daniel Marx
Analyst
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Upgrades Remington Arms' Ratings
No Related Data.
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