New York, September 24, 2016 -- Moody's Investors Service ("Moody's") downgraded Pinnacle Operating Corporation's Corporate Family Rating (CFR) to Caa1 from B3. The downgrade reflects the company's tight liquidity with lower availability under the ABL revolver, caused by the reduced inventory values due to lower fertilizer pricing. In order to address its near-term liquidity needs, Pinnacle has added $75 million in unrated term loan debt, due November 15, 2018, further driving up its already high leverage. The new debt is in the form of a $50 million first lien delayed draw term loan and a $25 million 1½ lien delayed draw term loan. Moody's expects that the lower fertilizer pricing environment, combined with potential for slower customer purchases, could reduce earnings such that it may be insufficient to cover 2016 interest expense and free cash flows could be negative. In conjunction with the downgrade of the CFR, Moody's also downgraded the Probability of Default rating (PDR) to Caa1-PD from B3-PD and the ratings on the first lien term loan due 2018 to Caa1 from B3, as well as the second lien senior secured notes due 2020 to Caa3 from Caa2. Pinnacle also has a $435 million ABL revolving credit facility due November 2017 that is unrated. The outlook is negative.

Vollständigen Artikel bei Moodys lesen