Moody's downgrades Carey

Moody's Investors Service said it downgraded Carey International, Inc.'s corporate family and probability-of-default ratings to Caa1 from B3, $35 million senior secured first-lien revolving credit facility due 2010 and $80 million senior secured first-lien term loan B facility due 2011 to B1 (LGD2, 22%) from Ba3 (LGD2, 17%) and $85 million senior secured second-lien term loan facility due 2012 to Caa2 (LGD5, 74%) from Caa1 (LGD4, 63%).

The outlook was changed to negative from stable.

The agency said the downgrade primarily reflects the tight near-term liquidity position that the company is facing as a result of weaker-than-anticipated financial performance during the year ended Dec. 31, which resulted in covenant violations. Recent amendments to the company's credit agreements cleared these violations, but the availability under the company's revolving credit facility may be reduced, thereby limiting its external liquidity.

The negative outlook reflects the uncertainty surrounding the company's external liquidity and the potential for further delays in the rollout of the company's new IT initiative that is slated to provide material reductions in operating costs, Moody's said.

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