S&P downgrades Koosharem

Standard & Poor's said it lowered Koosharem Corp.'s corporate credit rating to CCC- from CCC and the issue-level ratings on its debt by one notch.

The outlook is negative.

The agency said the downgrade reflects Koosharem's continued delays in delivering its 2009 audited financial statements; Koosharem's strained liquidity, as first-lien lenders have frozen its access to borrowing; and the risk that the first-lien lenders could accelerate their loans if the company is not able to deliver financial statements over the near term.

S&P said it views Koosharem's business risk profile as vulnerable because of its position as a small player in the highly fragmented, competitive and cyclical temporary staffing industry.

The lease-adjusted debt-to-EBITDA ratio was 7.8 times for the 12 months ended Sept. 5. The agency plans to further lower the corporate credit rating if it becomes convinced that the company will seek to restructure its debt for equity.

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