Moody's cuts Interpool ratings

Moody's Investors Service said it lowered the ratings of Interpool Inc. and its affiliates, including Interpool's senior unsecured debt rating to Caa1 from B3, senior implied rating to B3 from B2, and Interpool Capital Trust's preferred stock to Caa3 from Caa1.

The ratings are on review for further downgrade.

According to Moody's, the rating actions reflect the increased uncertainty regarding the quality of the company's accounting practices and its impact on the completion of the company's audited 2002 financial statements and the restatement of 2000 and 2001 results as well as lender confidence. The uncertainty has been heightened by the announcement of a further delay in the completion of Interpool's audited results.

Interpool's annual financial statements for fiscal year 2002 have been delayed since March 2003. On Dec. 29, the company announced that it expected further delay in the release of its audited financials.

Moody's noted there is growing pressure on the company to complete its 2002 10-K and restatements of prior year results by Jan. 9 - the expiration date of covenant waivers regarding financing agreements that require the filing of timely audited financial statements. Filing past Jan. 9 would force Interpool to seek a fourth extension of these waivers from its lenders.

Moody' said that absent these additional waivers, Interpool would be technically in default. Such a covenant default could lead to the cross-default and/or cross-acceleration of a number of Interpool's debt obligations.

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