Moody's cuts TransMontaigne view to negative

Moody's Investors Service said it changed the outlook of TransMontaigne Inc. to negative from stable.

TransMontaigne currently has a B1 corporate family rating and a B3 rating on its $200 million of senior subordinated notes due 2010.

The change in outlook is triggered by what Moody's said is its need to assess whether there has been a material lasting impact on the company's business or liquidity arising from the extraordinary impact of Hurricanes Rita and Katrina on refined product infrastructure, patterns of physical flows, and commercial arrangements.

These storms caused a breakdown in contractual and benchmark pricing relationships in the merchant refined product sector. To stem its mounting losses arising from those conditions, TransMontaigne ceased pricing its delivered product off of certain key benchmarks embedded in its customer supply contracts, generating customer discontent and potentially triggering claims that will need to be settled through dispute resolution.

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