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S&P cuts Quality Distribution
Standard & Poor's said it lowered its ratings on Quality Distribution Inc., including the corporate credit rating to B- from B+, the senior secured debt to B- from B+ and the subordinated debt rating to CCC from B-. S&P also lowered Quality Distribution LLC's senior secured bank loan to B- from B+.
The outlook is stable.
According to S&P, the downgrade reflects the continued deterioration in Quality Distribution Inc.'s financial profile despite strong demand for the company's transportation services. During the first half of 2004, the company has reported higher operating costs associated with insurance claims, environmental remediation, start-up costs of the juice business, and continued investigation and litigation expenses associated with reinsurance issues at the company's insurance subsidiary.
S&P said ratings on Quality Distribution Inc. reflect its participation in a low-margin, fragmented industry, combined with a weak financial profile.
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