Moody's affirms CST

Moody's Investors Service said it affirmed CST Industries, Inc.'s B2 corporate family and probability-of-default ratings and revised the outlook to negative from stable.

The agency also affirmed the company's B1 (LGD3, 36%) ratings on senior secured revolving credit facility and first-lien term loan.

The negative outlook reflects concerns about CST's ability to comply with its financial covenants under the first-lien credit agreement and the potential impact on CST of softness in certain of its industrial end markets, according to the agency.

The B2 corporate family rating reflects the company's small size, high leverage and a moderately acquisitive financial philosophy, the agency said.

Ratings are supported by expectation for breakeven to positive free cash flow, the company's leading position in a segment of the pre-fabricated tank market and its broad customer base and diverse end markets, the agency noted.

© 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.