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Moody's cuts Supresta outlook to negative
Moody's Investors Service said it changed the outlook on Supresta LLC's ratings to negative from stable and affirmed the company's B1 rating corporate family rating and the B1 rating on the its $25 million senior secured revolver and $140 million secured term loan.
The change in the outlook to negative is due to lower-than-anticipated free cash flow, a lack of meaningful repayment of debt in 2005, Moody's expectation that free cash flow may remain relatively weak in 2006 and Supresta's need to amend its credit facility covenants as a result of not passing its interest coverage covenant as originally set for the fourth quarter of 2005, the agency said.
The affirmation of the ratings anticipates that Supresta will gain approval of an amendment to its financial covenants under its $165 million credit agreement for 2006 and 2007 from its lenders, Moody's said.
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