S&P cuts Baker Tanks

Standard & Poor's said it lowered its ratings on Baker Tanks Inc., including lowering the corporate credit rating and senior secured bank loan rating to B from B+. At the same time, S&P affirmed its recovery rating of 3 on the company's increased bank facility.

The outlook is stable.

Baker Tanks is increasing its term loan to $175 million from the current outstanding balance of $121 million. Current cash balances along with net proceeds from the increased bank facility and issuance of an additional $7.5 million of operating company mezzanine debt will be used to make a distribution to equity holders and redeem $23 million of holding company mezzanine debt.

S&P said the downgrade reflects higher leverage and a more aggressive financial policy. The increase in debt shortly following the highly leveraged acquisition by Code Hennessy & Simmons LLC and use of debt to reward shareholders will delay previously anticipated improvements in credit protection measures.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.