Moody's downgrades Sirva Worldwide

Moody's Investors Service said it lowered the corporate family and probability-of-default ratings of Sirva Worldwide Inc. to B3 from B2, reduced the loss-given-default rate to 38% from 46% and affirmed the B2 senior secured debt rating and LGD3 loss-given-default assessment.

The downgrades reflect Moody's belief that operating margins will be pressured over the intermediate term due to lower demand for Sirva Worldwide's moving services from a softening U.S. housing market, pricing pressure because of its focus on maintaining respective market share and pressure from corporate customers focused on cost reductions. In an 8-K form filed on Aug. 15, preliminary, unaudited financial statements showed a debt to EBITDA ratio of 8.4x and meaningfully negative free cash flow.

The agency said it plans to withdraw the ratings due to a lack of adequate financial information. Sirva Inc., Sirva Worldwide's holding company parent, has yet to file a 10-K report for the year ended Dec. 31, 2005, and the last 10-Q report it filed was for the quarter ended Aug. 31, 2004. In addition, the company reiterated in August that its annual financial statements filed for the years ended Dec. 31, 2002 through 2004 and for all quarterly periods beginning after Dec. 31, 2001 should not be relied upon because of accounting errors in these financial statements.

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