S&P downgrades Modular Space

S&P said it lowered the corporate credit and senior secured debt ratings on Modular Space Corp. to CCC from B-.

The agency also said it revised the CreditWatch status of the ratings to negative from developing.

The downgrade was based on the uncertainty about Modular Space’s ability to refinance its asset-based credit facility that matured in June, S&P explained.

The facility had been extended while the company was engaged in discussions with Algeco Scotsman Global Sarl for the companies to combine their North American modular space operations, the agency said.

But those discussions were terminated Aug. 15 and now Modular Space is likely to default if it is not able to refinance this facility as the company does not have enough sources of liquidity to repay this facility, S&P said.

Of the loan, $575 million was outstanding as of Sept. 30, which was the last reported information, the agency said.

The CreditWatch placement will be resolved when there is greater clarity about the company's efforts to refinance the credit facility, S&P said.

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