Moody’s cuts Downstream Development

Moody’s Investors Service said it downgraded Downstream Development Authority’s corporate family rating to Caa3 from B3.

The agency also lowered the company’s probability of default rating to Ca-PD/LD from B3-PD and its senior secured notes rating to Caa3 from B3.

Moody’s said it added an ‘/LD’ designation to the Ca-PD rating to indicate a limited default after the company entered a modification agreement with its bank lender. On March 31, to preserve liquidity, Downstream and its term loan lenders entered into a modification agreement that includes payment of interest only for the quarters ended March 31, June 30 and Sept. 30, effectively waiving the term loan amortization for those quarters, the agency said.

DDA has about $12 million of unrestricted cash on its balance sheet. Moody’s said it plans to remove the /LD designation in about three business days.

The outlook is negative.

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