S&P lowers TransMontaigne

Standard & Poor's said it lowered its corporate credit rating on TransMontaigne Inc. to BB- from BB and subordinated debt rating to B from B+ and removed the ratings from CreditWatch with negative implications.

The outlook is now negative.

S&P said the rating actions follow a review of the company's historic and prospective financial performance and its current business model. In S&P's opinion, a rise in refined product prices has led to aggressive borrowing on the company's working-capital facility, weakening TransMontaigne's financial flexibility, increasing the capital intensity of the company's business, and raising debt leverage.

Although TransMontaigne strengthened its financial profile modestly during the quarter ended March 31, liquidity and financial performance measures remain well-below S&P's expectations and are not expected to reach such expectations in the near term. Further increases in debt leverage or a weakening of the company's profitability or cash flow could provoke an additional ratings downgrade.

S&P said the ratings on TransMontaigne reflect its mix of a stable terminal business offset by a higher-risk supply, marketing, and trading business, high debt leverage, and somewhat weak cash flow generation.

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