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S&P ups Motor Coach
Standard & Poor's raised its corporate credit rating on Motor Coach Industries International Inc. to B- from CCC and raised its subordinated debt rating on Motor Coach to CCC from CC.
The outlook is negative.
S&P said the rating upgrades reflect the easing of financial stress following a successful recapitalization and expectation of improved operating performance over the next 12 to 18 months as the business recovers.
The ratings reflect Motor Coach's below-average business profile and its high financial risk profile, characterized by a highly leveraged capital structure and weak cash flow protection, according to S&P.
At Dec. 31, 2003, debt to EBITDA stood at 10.4x and EBITDA cash interest coverage was about 1.5x. Over the next 12 to 18 months debt to EBITDA should decline to 5x to 6x and EBITDA cash interest coverage should strengthen to 1.5x.
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