Moody’s cuts WireCo CFR, facility, notes

Moody's Investors Service said it downgraded the corporate family rating of WireCo WorldGroup Inc. to B3 from B2 and its probability of default rating to B3-PD from B2-PD.

In addition, the rating on the senior secured bank credit facility was downgraded to Ba3 from Ba2 and the senior unsecured notes were downgraded to Caa1 from B3.

The outlook was revised to negative from stable.

Moody’s said the downgrade results from weakening operating performance, the expectation that credit metrics will deteriorate in 2015 and that the cushion in WireCo's existing financial covenants will narrow considerably in 2015. Also, the agency noted that all of the company's debt matures in 2017.

Despite incorporating its expectations for some balance sheet debt reduction, Moody’s anticipate WireCo will remain highly leveraged over the next 12 to 18 months given weak end market demand. It projects adjusted debt-to-EBITDA will be over 7 times.

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