Moody’s cuts Reddy Ice, rates revolver

Moody's Investors Service said it downgraded Reddy Ice Corp.’s corporate family rating and probability of default rating to Caa2 and Caa2-PD from Caa1 and Caa1-PD, respectively.

The agency also assigned a B3 rating to the company's $50 million senior secured first-lien revolving credit facility maturing April 2019 and affirmed the existing B3 rating on the company's $225 million principal senior secured first-lien term loan due May 2019.

At the same time, Moody's withdrew the B3 rating on the company's former $50 million senior secured first-lien revolving credit facility expiring May 2018.

The outlook was changed to stable from negative.

"We have downgraded our fundamental ratings for Reddy Ice given what we view to be a rising probability of default, with a shrinking time horizon to refinance the company's debt obligations and ongoing weakness in earnings and liquidity," Moody's vice president, senior analyst Brian Silver said in a news release.

"Although the recent amendment affords a modest liquidity buffer over the near term by widening covenant headroom and pushing out the revolver expiration, the company's term loan comes current in May 2018, and refinancing options remain increasingly uncertain."

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