S&P lowers Tank to negative

S&P said it revised the outlook on Tank Holding Corp. to negative from stable and affirmed the company’s B corporate credit rating.

The agency also said it affirmed the B rating on the company’s first-lien credit facilities.

The 3 recovery rating on the debt is unchanged, indicating 50% to 70% expected default recovery.

The outlook revision reflects the challenging conditions in Tank’s end markets and the risk that the company’s credit measures will remain weak, including a debt-to-EBITDA ratio in excess of 6.5x over the next 12 months, S&P said.

Lower commodity prices and declining farm income are causing the company’s customers to delay the replacement of their agricultural tanks, the agency explained.

Demand in the agricultural segment, which comprises about half of the company’s revenues, is expected to remain soft through 2016, S&P said, before stabilizing in 2017.

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