Moody's may downgrade Central Parking, rates loans Ba2, B2

Moody's Investors Service said it kept Central Parking Corp.'s Ba3 corporate family and probability-of-default ratings and the B2 (LGD6, 93%) $78 million 5.25% convertible trust issued preferred securities issued by the Central Parking Finance Trust on review for downgrade and affirmed the company's $225 million senior secured revolving credit facility due 2008 and $74 million senior secured term loan facility due 2010 at Baa3 (LGD2, 15%).

The agency also assigned provisional B2 corporate family and probability-of-default ratings to KCPC Acquisition, Inc., provisional Ba2 (LGD2, 19%) ratings to its proposed $75 million six-year first-lien revolving credit facility, $225 million seven-year first-lien term loan facility and $55 million seven-year first-lien synthetic letter-of-credit facility and a provisional B2 (LGD4, 51%) rating to its proposed $50 million 71/2-year second-lien term loan facility.

The outlook for KCPC is stable.

Central Parking announced in February that it entered into a definitive agreement to be acquired by a consortium of private investment funds. KCPC, a newly formed holding company owned by affiliates of Kohlberg & Co. LLC, Lubert-Adler Partners, LP and Chrysalis Capital Partners, Inc., will merge with and into Central Parking.

The proceeds from the proposed loans will be used to partially fund the equity component of the buyout, to retire existing debt and to pay related fees and expenses.

The agency said the provisional B2 corporate family rating reflects a more than four-fold increase in consolidated debt levels as a result of the buyout.

Although constrained by modestly weak credit metrics for the B2 rating category and an uneven track record of financial performance, the ratings are supported by the company's leading market position, improving profitability over the last year and the expectation for growing demand for outsourced parking services, Moody's added.

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