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S&P downgrades IDQ Holdings
Standard & Poor's said it lowered the corporate credit rating on IDQ Holdings Inc. to B- from B.
The outlook is stable.
The agency also said it lowered the rating on the company's $220 million senior secured notes due 2017 to B- from B. The recovery rating on this debt remains 4, indicating 30% to 50% expected default recovery.
The downgrade reflects IDQ's weakening operating performance and cash flow generation resulting from unfavorable weather conditions in the first half of 2013 that resulted in a 17.5% sales decline in the first half of the year, S&P said.
The agency said it expects a modest rebound in performance in 2014, including a reduction in leverage to the low-5x range.
However, S&P said it still expects metrics will remain indicative of a highly leveraged financial risk profile over the next year.
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