Moody's may downgrade Dresser

Moody's Investors Service said it placed Dresser, Inc.'s B1 corporate family rating, B2 probability-of-default rating and B1 (LGD3, 37%) senior secured bank credit facilities under review for possible downgrade following the announcement that Riverstone Holdings LLC, in partnership with First Reserve and Lehman Brothers Co-Investment Partners, has signed a definitive agreement to acquire Dresser from First Reserve and Odyssey Investment Partners, LLC. The buyout is expected to be financed largely with debt.

The review for possible downgrade reflects the agency's estimate that Dresser's balance sheet debt obligations will more than double following the transaction and that its pro forma debt-to-EBITDA ratio will be higher than all of its B1 rated peers.

Moody's noted that Dresser's operating performance has been improving recently and that its business profile is more indicative of the Ba rating category; however, the company's weakened financial profile, in addition to the challenges the company faces in order to complete its restated financial statements and remediate its material weaknesses over internal controls, represents an elevated overall risk profile that may not be compatible with the B1 corporate family rating.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.