Moody's upgrades DS Waters

Moody's Investors Service said it upgraded DS Waters Enterprises, LP's $245 million senior secured credit facility - which includes a $80 million revolver due 2008 and approximately $165 million of outstanding term loans due 2009 - to B2 from B3 and corporate family rating to B3 from Caa1.

Moody's said the upgrade reflects the continued significant improvement in the company's financial and operating profile. Since the beginning of the year, DS Waters has reduced debt by over $67 million through a combination of improved cash flow and the monetization of a large receivable ($35 million in proceeds) from Groupe Danone.

While improvement is recognized, DS Waters' ratings are constrained by the ongoing challenges in home/office water delivery, including limited pricing flexibility due to ongoing significant competition from lower-priced water coolers being sold at retail outlets and still declining volumes, the agency said. Also constraining the ratings is the still-limited track record for free cash-flow generation and sustained earnings improvement following the sale of the company in November 2005, lack of full-year audited financial statements and contingency surrounding eventual refinancing in 2007.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.