S&P cuts Wastequip, rates loans B, CCC+

Standard & Poor's said it lowered its corporate credit rating on Wastequip Inc. to B from B+.

At the same time, S&P said it assigned its B bank loan rating and 3 recovery rating to the company's proposed $240 million first-lien senior secured credit facilities and assigned its CCC+ bank loan rating and 5 recovery rating to the company's proposed $100 million second-lien credit facility.

The outlook is stable.

S&P said the downgrade reflects the company's more aggressive financial policy and increased use of leverage, contributing to deterioration in the company's financial risk profile.

The ratings on Wastequip reflect the company's highly leveraged balance sheet, limited cash-flow generation and meaningful customer concentration, S&P said, adding that these risks are partially mitigated by the company's leadership position in an industry with steady secular growth prospects, its ability to pass on raw-material cost increases, especially for steel, to its customers and its low capital-intensiveness.

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