S&P may lower TransMontaigne

Standard & Poor's said it placed its BB corporate credit and B+ subordinated debt ratings on TransMontaigne Inc. on CreditWatch with negative implications.

"The negative CreditWatch listing reflects the likelihood of a negative rating action in the near term, resulting from TransMontaigne's reduced liquidity combined with very aggressive debt leverage reported for the six months-ended Dec. 31, 2003," said S&P credit analyst Paul B. Harvey.

"Continued strong commodity prices through the second half of 2003 raised TransMontaigne's cost of inventory and increased borrowing levels from its credit facility, resulting in decreased liquidity."

Only $37 million remained available from its credit facility and $16.5 million cash on hand as of Dec. 31, 2003, and as a result, TransMontaigne's liquidity is very vulnerable to a further run-up in crude oil prices, the agency said.

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