Moody's pares Phoenix Services

Moody's Investors Service said it downgraded Phoenix Services International LLC's corporate family rating to Caa1 from B2, its probability of default rating to Caa1-PD from B2-PD and the rating on Phoenix Services Merger Sub, LLC's $65 million senior secured first-lien revolving credit facility and its $465 million senior secured first-lien term loan to Caa1 from B2.

"The downgrade of Phoenix Services' ratings reflects its weak operating performance despite increased steel production at its mill sites due to operational issues and inflationary cost pressures, which have resulted in credit metrics that are likely to remain weak for the Caa1 corporate family rating. It also reflects the risks related to the looming maturity of its revolving credit facility in March 2023 and the need to pursue equipment leases to support new business due to its weak liquidity profile," said Michael Corelli, a Moody's senior vice president and lead analyst for Phoenix Services International, in a press release.

The outlook is negative.

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