S&P cuts CST to B-

Standard & Poor's said it lowered the corporate credit rating on CST Industries Inc. to B- from B, along with its issue-level ratings by one notch.

The outlook is negative.

The downgrades reflect a view that CST's thin margin of headroom under its financial covenants could trigger a financial covenant violation in the second half of 2011, S&P said.

The negative outlook reflects the potential for a downgrade if CST is unable to negotiate adequate covenant relief, the agency said.

The ratings reflect the company's highly leveraged financial risk profile and weak business risk profile as a participant in the fragmented and competitive metal storage tank market, S&P said.

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