Moody's downgrades Willbros

Moody's Investors Service said it downgraded Willbros United States Holdings Inc.'s corporate family and probability of default ratings to B3 from B2, senior secured bank ratings to B3 from B2 and speculative grade liquidity rating to SGL-4 from SGL-3.

The long-term ratings were placed under review for further possible downgrade.

The agency said the rating action was driven by Willbros' weaker-than-expected earnings following its levered acquisition of InfrastruX Group, Inc. in mid-2010 as well as its fourth-quarter and full-year 2010 earnings guidance, which is substantially lower than Moody's prior expectations. As a result, the agency now expects adjusted leverage will be closer to 5.5x in 2010, compared with its prior expectation of under 4x, pro forma the InfrastruX acquisition.

The review will focus on the company's plans to improve its liquidity position. Moody's said further downward rating action could occur if the company is unable to obtain sufficient relief to its covenants in the near term.

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