Fitch downgrades Interpipe

Fitch Ratings said it downgraded Interpipe Ltd.'s long-term issuer default rating to B- from B and its senior unsecured rating to B-/RR4 from B/RR4. The short-term issuer default rating is unchanged at B.

The ratings were placed on Rating Watch negative.

Interpipe announced on Dec. 11 that Millen Financial Ltd., a company owned by Interpipe's ultimate shareholders, had offered to purchase $200 million 8 7/8% bonds due 2010 from Interpipe bondholders at between 47% and 55% of par value. Interpipe simultaneously announced that it was seeking to amend covenants contained in the bond documentation.

The downgrades reflect Fitch's view that Interpipe's request to amend the covenants and expand the list of permitted debt signals ongoing and increased negative pressure on the issuer's credit profile. The agency said factors contributing to this view include the ongoing uncertainty affecting the metal and mining industry due to the global economic recession, an associated sharp downturn in steel prices and a decline in demand for the company's core products.

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