Weekly Downgrade Wrap-Up (Slow Week)

As usual, we have a week’s worth of ratings agency downgrades, upgrades, revisions and withdrawals on the debt of LBO-backed companies, via Standard & Poor’s and Moody’s Investor Services. It was a light week coming off the big Chrysler filing. No worries, two frequent downgraders, Ply Gem and First Data, didn’t disappoint.

Company: First Data Corp.
Sponsor: KKR
Downgrade: Moody’s downgraded the company’s corporate family and probability of default ratings to B1 from b2.
Highlights: “We expect slight revenue and EBITDA declines for 2009 with only modest recovery for 2010. As a result, we believe the company will not be able to significantly de-leverage until 2011 at the earliest, at which time the company faces increasing cash interest payments as the company’s 10.55% unsecured PIK notes convert to cash pay after September 2011.”

Company: Noranda Aluminum Holding Corp.
Sponsor: Apollo Management
Downgrade: S&P lowered its rating on the company’s senior secured credit facilities to ‘CC’ (the corporate credit rating is ‘SD’) from ‘B’.
Highlights: “This rating action follows our assessment of the company’s amendment to its bank facility that permits it to repurchase amounts outstanding under the facility at a discount from par utilizing an auction, which extends until Sept. 15, 2010.”

Company: Integra Telecom
Sponsor: Warburg Pincus, Banc of America Capital Investors and Boston Ventures
Downgrade: Moody’s downgraded the company’s probability of default rating to Ca from Caa1.
Highlights: The action is “based on expectations of imminent default on at least a portion of its debt obligations based on certain ongoing actions being undertaken by the Company to restructure its balance sheet.

Company: Workflow Management Inc.
Sponsor: Credit Suisse Private Equity and Perseus LLC
Ratings Action: S&P raised the company’s rating to ‘CCC-‘ from ‘SD.’
Highlights: “The ‘CCC-‘ corporate credit rating reflects Workflow Management’s significant debt service requirements, recent operating challenges, and limited liquidity.”

Company: Motorsport Aftermarket Group Inc.
Sponsor: Leonard Green & Partners
Downgrade: S&P lowered the company’s corporate credit rating to ‘CCC+’ from ‘B-‘.
Highlights: “The downgrade reflects Standard & Poor’s concern that company’s weakening operating performance and rising debt leverage could jeopardize its ability to comply with bank debt covenant levels.”

Company: Ply Gem Industries
Sponsor: CI Capital Partners
Downgrade: Moody’s affirmed the company’s corporate family rating of Caa2, upgraded the company’s probability of default rating to Caa2 and removed the limited default (“LD”) designation.
Highlights: Ply Gem’s Caa2 corporate family rating takes into consideration its weakened financial performance due to the contraction in new home construction and a reduction in large ticket home remodeling, weakening liquidity profile, and its high financial leverage.

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