Moody's drops CorpSource

Moody's Investors Service said it downgraded the corporate family rating of CorpSource Finance Holdings, LLC to Caa1 from B2.

The outlook remains negative.

The downgrade reflects CorpSource's weak financials strength metrics, the potential for a breach of financial covenants in 2010 and concern about the sustainability of the capital structure, Moody's said, adding that it expects profitability to decline in the back half of 2009, which should lead to Adjusted debt to EBITDA of over 7 times.

Given the weak profit trends and credit metrics, the company may have difficulty refinancing the PIK notes prior to the March 2012 maturity date and may need to complete a balance sheet restructuring over the next two years, the agency noted.

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