Moody's lowers Willbros default rating

Moody's Investors Service said it affirmed Willbros United States Holdings Inc.'s B3 corporate family rating, B3 senior secured bank ratings and SGL-4 speculative-grade liquidity rating, but lowered the company's probability of default rating to Caa1 from B3.

The outlook remains negative.

The ratings reflect a belief that the company's liquidity will remain weak through 2012 due to the possibility of a bank financial covenant breach, Moody's said.

The probability of default rating was lowered because Moody's said it expects the company's convertible notes will be retired over the next year, at which point the company's bank facility will represent its sole debt instrument.

The other ratings are primarily driven by the company's weak liquidity and elevated financial leverage, Moody's said, as well as the company's significant exposure to fixed-price construction contracts in highly competitive and cyclical end markets.

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