Moody's lifts Ozburn-Hessey

Moody's Investors Service said it revised Ozburn-Hessey Holding Co., LLC's probability of default rating to Caa1from Caa2 following the completion of a debt for equity exchange which Moody's said it views as a distressed exchange.

Concurrently, Moody's raised the company's corporate family rating to Caa1 from Caa2 to reflect the company's somewhat improved credit profile as a result of the exchange and recent debt covenant amendments. The company's first-lien credit facility was upgraded to B1 from B2.

The outlook was changed to stable from negative.

Moody's said the upgrade is based on its view that the company's probability of default has decreased as a result of the equity infusion from the private equity sponsor which has led to the repayment of $30 million of first-lien bank debt, the paydown of revolver borrowings, and additional cash on the balance sheet to fund investments in IT.

In addition, Moody's said it believes the recently amended covenants have improved the company's liquidity profile to adequate from weak as the company is anticipated to have good covenant headroom over the next 12 months.

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