Moody's upgrades Downstream Development

Moody's Investors Service said it upgraded Downstream Development Authority's corporate family rating to B3 from Caa1, its probability of default rating to B3-PD from Caa1-PD and the rating on its $295 million 10½% senior secured notes to B3 from Caa1 following the authority's announcement that it has closed an amendment to its $30 million term loan (unrated).

The outlook is stable.

Downstream's B3 corporate family rating reflects its small size in terms of revenue and high leverage and thin interest coverage given its reliance on one property for all of its earnings. Moody's expects Downstream's debt/EBITDA to remain above 5.5 times over the next 12 months, a level it considers high given its small size and lack of diversification.

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