S&P cuts IDQ outlook

Standard & Poor's said it revised its outlook on IDQ Holdings Inc. to negative from stable.

The agency said it also affirmed its B corporate credit rating on the company, which is majority owned by financial sponsor Castle Harlan.

At the same time, the agency said it affirmed its B senior secured rating and corresponding 4 recovery rating on the $220 million senior secured notes due 2017, indicating an expectation for average recovery in the event of payment default.

IDQ recently announced its proposal to issue $45 million in five-year senior secured payment-in-kind notes to fund a dividend to shareholders.

The agency said the outlook revision reflects its view that IDQ's proposed debt-financed dividend reflects a more aggressive financial policy, resulting in pro forma adjusted leverage and EBITDA interest coverage ratios of 5.9x and 1.7x, respectively.

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