Moody’s cuts Maxim Crane

Moody’s Investors Service said it downgraded the ratings of Maxim Crane Works Holdings Capital, LLC, including the company’s corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD and $545 million 10 1/8% senior secured second-lien notes due August 2024 to Caa1 from B3. This rating action finishes the review for downgrade Moody’s started on March 26, the agency said.

“The downgrade of Maxim’s ratings reflects Moody’s expectation that equipment utilization will decline around 10% in 2020, coupled with some margin compression from pricing pressure will cause the topline and profitability to weaken and leverage to climb above seven times debt-to-EBITDA,” said Brian Silver, a Moody’s vice-president and lead analyst for Maxim, in a press release.

“However, Maxim’s liquidity will remain adequate throughout 2020, in large part from ABL availability. Although there is time to de-lever prior to its debt coming due in 2024, if construction activity worsens considerably beyond 2020, the ratings could face downward pressure,” Silver said.

The outlook is stable.

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