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S&P downgrades Eco-Bat
Standard & Poor's said it lowered the long-term corporate credit rating on Eco-Bat Technologies Ltd. to B from B+, along with the its senior unsecured notes due 2017 to B from B+.
The recovery rating on the senior unsecured notes remains unchanged at 3, indicating 50% to 70% expected recovery in a default.
The outlook is stable.
The downgrade reflects an estimate that new recycling capacity in the United States, together with a contraction of the auto market in Europe, will translate into weak cash flow in 2013, S&P said.
This is in addition to ongoing pressure on margins, the agency said.
Consequently, S&P said it anticipates a material drop in Eco-Bat's EBITDA in 2013 and 2014 from £154 million in the 12 months to Sept. 30, 2012. The 2012 figure was already down substantially from £197 million in full-year 2011 on the back of low lead prices and low availability of scrap lead, the agency said.
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