S&P lowers Securus

Standard & Poor's said it lowered Securus Technologies Inc.'s corporate credit rating to B- from B, lowered its $194 million senior secured second-lien notes to B- with a recovery rating of 4 from B+ with a recovery rating of 2 and removed them from CreditWatch with negative implications.

The outlook is negative.

Securus' ratings were originally placed on CreditWatch on Sept. 27 following the company's announced downward revision in its 2007 financial guidance. Securus disclosed in its third-quarter 10-Q report that it was not in compliance with the minimum interest coverage ratio required under its revolving credit facility. To remedy future potential defaults, the company received a $10 million equity investment from H.I.G. Capital Partners III, LP.

The agency said the downgrade reflects its view that the company's liquidity is extremely limited, given uncertainty about operating performance over the next year. For the nine months ended Sept. 30, EBITDA declined by 29% and the fourth quarter should also be weak. While improvement is anticipated this year, the company could again be out of compliance with its bank loan financial covenants and will have ongoing limited cushion to meet covenants throughout the year, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.