S&P cuts United Subcontractors

Standard & Poor's said it lowered the corporate credit rating on United Subcontractors Inc. to CCC- from CCC+.

The outlook is negative.

"The downgrade reflects our assessment that [the company's] ability to service its current capital structure over the intermediate term will be difficult because of the continued depressed level of residential construction activity, particularly in USI's key end markets in Florida, Arizona and Utah," S&P analyst Thomas Nadramia said in a statement.

The action also reflects the likelihood of a near-term covenant violation, the agency noted.

The CCC- corporate credit rating reflects the company's heavy debt burden, limited covenant cushion and liquidity position, weak credit metrics, modest revenue base, cyclical end markets, narrow product focus and limited geographic diversity, according to the agency.

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