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Moody's affirms IESI; outlook negative
Moody's Investors Service said it affirmed the B1 corporate family, probability of default and senior secured debt ratings of IESI Corp. and changed the outlook to negative.
The negative outlook reflects the expected erosion of the current modest cushion with the leverage covenant of the senior secured credit facility, the agency said, adding that the permitted maximum debt to EBITDA ratio steps down at March 31, 2009, to 4.0 times, about the level which the company's operations are currently producing.
Moody's said it believes the potential exists for a breach of the leverage covenant at the March 31, 2009 measurement date unless IESI can sufficiently reduce debt to ensure compliance, or obtain relief from the lower maximum level.
The ratings affirmation considers leverage and cash-based coverage of interest measures that are indicative of B1 rated corporate families, and that have been maintained while executing an acquisitive growth strategy, Moody's said.
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