Moody’s cuts Stafford, loan to Caa1

Moody's Investors Service said it downgraded Stafford Logistics Holdings Inc.'s corporate family rating to Caa1 from B3, probability of default rating to Caa2-PD and the first-lien credit facility rating to Caa1.

The downgrades reflect the agency’s concerns that the company's tight liquidity and high leverage elevate the company's default risk.

The outlook was changed to stable from negative.

Moody’s said the downgrade of the corporate family rating to Caa1 reflects its concern that Stafford's weak liquidity and leverage (projected to be 5.2 times to 5.5 times in 2015) elevates the company's default risk, particularly in the current debt market which is increasingly discerning on providing capital.

While the agency expects the company to generate positive cash from operations in 2015, that cash will be use to purchase new tractors for the company's fleet, lowering the average vehicle age to under two years.

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