As usual, we have a week’s worth of ratings actions on the debt of LBO-backed companies from ratings agencies Standard & Poor Ratings Services and Moody’s Investors Service.
I also wanted to say that I love the formalities of the ratings agencies, particularly when it comes to bankrupt companies. I know it’s all very serious and important and part of procedure, but it seems so obvious and silly the way that, once a company defaults, Moody’s downgrades a its “Probability of Default” rating to “Default.” Something about the redundancy of it is amusing to me. Less amusing, unfortunately, is the company I’m referring to. Building materials manufacturer Atrium Cos. filed for bankruptcy yesterday; the company was backed by golden boys Golden Gate Capital and a firm called Kenner & Co.
Company: Atrium Cos. Inc.
Sponsor: Golden Gate Capital and Kenner & Co.
Action: S&P lowered the issue-level rating on Atrium Cos. Inc.’s 15% senior subordinated notes due 2012 and 11% senior subordinated notes due 2012 to ‘D’ from ‘CC’.
Highlights: The company filed for Chapter 11 bankruptcy protection.
Company: Texas Industries, Inc.
Sponsor: Shamrock Holdings
Action: Moody’s downgraded the company’s corporate family rating and probability of default rating to B2 from B1, the rating on its $200 million senior secured credit facility to Ba2 from Ba1, and the rating on its $550 million senior unsecured notes to B3 from B2.
Highlights: The rating downgrade results from continued weakness in Texas Industries’ end-markets and resulting impact on the company’s operating performance and credit metrics.