Moody's lowers Wastequip

Moody's Investors Service said it lowered the corporate family and probability-of-default ratings of Wastequip Inc. to Caa2 from Caa1 and senior secured credit facility and term loan to B3 (LGD2, 28%) from B2 (LGD2, 28%).

The downgrade reflects the view that revenues and earnings will remain at relatively low levels and that financial leverage will remain elevated over the near term, Moody's said.

The Caa2 rating reflects questions about the company's ability to refinance its revolver in 2012 and its term loan in 2013 given the amount and complexity of its debt load, the agency said.

In the near term, these concerns are somewhat allayed by high cash balances, expectation for positive cash generation in 2010 and the view that prospective covenant violations are unlikely given the flexibility provided by debt terms, the agency noted.

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