Moody’s lowers UniTek, loan

Moody's Investors Service said it downgraded UniTek Global Services, Inc.'s probability of default and corporate family ratings to Ca-PD/LD and Ca, respectively.

Moody's also downgraded the rating on UniTek's bank term loan to Ca.

The SGL-4 speculative grade liquidity rating was affirmed and the outlook is negative.

The limited default "LD" designation appended to UniTek's probability of default rating reflects UniTek's entering into a forbearance agreement with its lenders on Aug. 8 and Moody's view that the company has defaulted under Moody's definition. The limited default designation will remain for three business days to reflect the agency’s view that a default has occurred. Thereafter, the LD will be removed.

On Oct. 2, UniTek entered into amendments to the term forbearance agreement and the revolver forbearance agreement to extend through Oct. 9, the standstill period contained in such agreements. Per the company's Aug. 13 8-K securities and Exchange Commission filing, the company took actions including the forbearance to "allow the company additional time and flexibility to execute on strategic initiatives related to its capital structure."

The continued extension of the standstill period combined with a weak liquidity position also underlie the current ratings, Moody’s said.

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