Moody's may downgrade Rural/Metro

Moody's Investors Service said it placed the ratings of Rural/Metro Corp. and its subsidiary Rural/Metro LLC on review for possible downgrade following the announcement that Rural/Metro failed to file its 10-Q report for the second quarter of 2007 with the Securities and Exchange Commission on time and that it would be restating its financial statements to reflect a change in accounting treatment with respect to certain inventories.

The ratings under review include Rural/Metro's B2 corporate credit and probability-of-default ratings and Caa1 (LGD6, 92%) $93.5 million 12¾% senior discount notes due 2016 and Rural/Metro LLC's Ba2 (LGD2, 15%) senior secured bank facilities - a $20 million revolving credit facility due 2010, $45 million letter-of-credit facility due 2011 and $100 million term loan B due 2011 - and its B3 (LGD4, 63%) $125 million 9 7/8% senior subordinated notes due 2015.

Because the company failed to file the 10-Q report on time, it received a notice of default on its $125 million senior subordinated notes and $93.5 million senior discount notes from Wells Fargo Bank and notice of a possible delisting of its common stock from the Nasdaq Capital Market, the agency said, adding that these issues may be resolved as required within the grace period under the indentures.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.