S&P lowers EnviroSolutions

Standard & Poor's said it lowered the corporate credit rating on EnviroSolutions Holdings Inc. to CCC from CCC+ and EnviroSolutions Real Property Holdings Inc.'s $210 million senior secured credit facilities to CCC from B- and revised the recovery rating to 3 from 2.

The outlook is negative.

"The downgrade reflects weaker-than-expected earnings as recessionary conditions and ESI's exposure to subdued construction-and-demolition waste volumes continue to adversely affect the company," S&P analyst Ket Gondha said in a statement.

Ratings reflect the company's narrow scope of activities, high interest burden contributing to negative free cash flow, limited liquidity and minimal cushion under financial covenants, the agency said.

Favorable overall industry characteristics and the company's decent competitive positions in two densely populated regional markets are unable to meaningfully offset a very highly leveraged balance sheet, the agency noted.

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