Moody’s cuts Watco

Moody’s Investors Service said it downgraded the ratings of transportation and logistics provider Watco Companies, LLC, including the corporate family rating to B2 from B1, the probability of default rating to B2-PD from B1-PD, and the rating of the $400 million senior unsecured notes due 2023 to Caa1 from B3. All ratings are on review for further downgrade.

The coronavirus outbreak, deteriorating global economic outlook, falling oil prices and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets, Moody’s said.

The weaknesses in Watco’s credit profile, including its thin margins and considerable historical funding needs for investments to expand its operations, have left it vulnerable to shifts in market sentiment in these unprecedented operating conditions, which are likely to hurt its credit metrics as the outbreak continues to spread, the agency said.

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