Moody's downgrades Thermadyne

Moody's Investors Service said it downgraded Thermadyne Holdings Corp.'s corporate family rating to Caa1 from B2 and $175 million 9¼% senior subordinated notes due 2014 to Caa2 from Caa1.

The outlook was changed to negative from under review for possible downgrade.

The agency said the downgrade reflects concerns regarding the modest level of Thermadyne's free cash flow generation given the significant working capital investment required to maintain reasonable levels of customer service; the company's liquidity, which relies heavily on its external sources and continues to be reduced by increased professional and other consent fees; and the continued internal control deficiencies coupled with the high level of turnover in its finance department, which raise concerns about the company's control environment, the reliability of its reported financial information and management's ability to accurately forecast results and control the business.

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