As usual, we have a week’s worth of ratings actions on the debt of LBO-backed companies by Moody’s Investors Service Standard & Poor’s Ratings Services.
Company: Rafaella Apparel Group
Sponsor: Cerberus Capital Management LP
Action: S&P lowered its corporate credit rating on Rafaella to ‘CC’ from ‘CCC’ and its issue-level rating on the senior secured notes to ‘C’ from ‘CCC-‘.
Highlight: The company commenced a modified Dutch auction tender offer to purchase up to 51% of its outstanding 11.25% senior secured notes due 2011.
Company: Standard Steel
Sponsor: Trimaran Capital Partners
Action: Moody’s downgraded the company’s corporate family and probability of default ratings to Caa1 from B3.
Highlight: “The corporate family rating downgrade to Caa1 reflects weakness in the railcar build market that will likely continue to weigh down Standard Steel’s earnings prospects in 2010 and possibly in 2011. Lower total earnings in 2010 will continue to constrain the company’s ability to generate a meaningful level of free cash flow for debt reduction, thus credit metrics could remain weak for an extended period.”
Company: United Site Services
Sponsor: DLJ Merchant Banking Partners
Action: Moody’s Investors Service withdrew its ratings on United Site Services, Inc.
Highlight: The ratings have been withdrawn because Moody’s believes it lacks adequate financial information to maintain a rating.