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S&P downgrades Sterling Mid-Holdings
S&P said it lowered the issuer credit rating on Sterling Mid-Holdings Ltd. to CCC from B-.
The agency also said it lowered the ratings on Sterling's 10˝% senior secured notes due 2020 to CC from B- and revised the recovery rating on these notes to 6 from 4.
The agency said it now expects negligible recovery on the notes of 0 to 10%.
The two-notch downgrade reflects the company’s ongoing weak operating performance as evidenced by the company reporting a net loss, coupled with EBITDA coverage of less than 1x for the past 12 months, S&P said.
The outlook is negative.
The company's overall financial performance is substantially below its peers and has persistently been weak, the agency said.
The ratings also consider the company's limited funding options due to its highly encumbered balance sheet, S&P said.
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