S&P cuts Eco-Bat, rates PIK notes CCC+

Standard & Poor's said it lowered its long-term corporate credit rating on Eco-Bat Technologies Ltd. to B from B+ following the announcement that EB Holdings Inc., which owns 86.5% of the shares in Eco-Bat, intends to issue €200 million of pay-in-kind notes due 2015 to fund a distribution to its shareholders.

At the same time, S&P lowered its senior unsecured debt rating on related entity Eco-Bat Finance plc, which is guaranteed by Eco-Bat, to B- from B. The outlook is stable.

In addition, S&P assigned its B long-term corporate credit rating to EB Holdings and its CCC+ long-term debt rating to EB Holdings' proposed €200 million PIK notes due 2015. The outlook is stable.

Although there is no cash flow impact on Eco-Bat of the proposed PIK notes in the short term, S&P said the notes still represent additional debt that might need to be refinanced in the future.

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