Moody’s drops PSC, facilities

Moody's Investors Service said it downgraded the ratings of PSC Industrial Outsourcing, LP, including its corporate family rating to B3 from B2 and probability of default rating to B3-PD from B2-PD.

Concurrently, the ratings on the bank credit facility were downgraded, including the first-lien term loan and revolving credit facility to B2 from B1, and the second-lien term loan to Caa2 from Caa1.

The outlook is stable.

Moody’s said the downgrade reflects lower-than-expected operating performance with margins and cash flow pressured by top-line declines, despite a large proportion of recurring revenue, leading to sustained high leverage, weak coverage metrics and reported operating losses.

Moreover, the agency anticipates that leverage will remain elevated and earnings under pressure amidst a difficult operating environment, including lingering weakness and limited visibility into the timing of a meaningful recovery in the company's energy end markets.

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