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Moody's lowers DS Waters
Moody's Investors Service said it downgraded the ratings of DS Waters Enterprises, LP to reflect the continued deterioration in the company's financial performance, its very high financial leverage, weak debt protection measures, reduced recovery rates for debt holders under a distressed scenario and the absence of transparency with regards to the company's near term strategic and financial plan.
The actions also incorporate the announcement by Groupe Danone to sell off its entire stake in DS Waters, the agency noted.
Despite DS Waters having been in compliance with its minimum EBITDA covenant as of the quarter ended April 1, it is Moody's opinion that compliance with this covenant over the near term is tenuous at best.
Affected ratings include the $480 million senior secured credit facility, consisting of a $100 million revolver due 2008 and about $380 million term loans outstanding due 2009, and corporate family rating lowered to Caa2 from B3.
The outlook remains negative.
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