Fitch drops Interpipe to CCC

Fitch Ratings said it downgraded Interpipe Ltd.'s long-term issuer default rating to CCC from B-, short-term issuer default rating to C from B and senior unsecured rating to CCC/RR4 from B-/RR4.

The long-term issuer default and senior unsecured ratings remain on Rating Watch negative pending outcome of covenants testing in fiscal year-end 2008 and fiscal year 2009.

According to Fitch, the downgrades reflect Interpipe's increasingly impaired capacity for meeting its financial obligations and passing covenants testing, given the global economic recession and the associated volatility in demand for, and pricing of, pipes and wheel products.

The agency said it believes Interpipe could breach its net debt-to-EBITDA covenant of lower than 2.5x under its $344 million Export Credit Agency finance facility. The agency estimates that fiscal year-end 2008 net debt-to-EBITDA ratio could be in the range of 2.49x to 2.8x.

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