Roughly $10 million of Encompass Services' bank debt was believed to have traded out of the hands of an original lender in the 65 context, after Standard & Poor's downgraded the company's credit rating from B+ to B. Dealers said the name had fallen from the mid-70s, where it had been quoted before the report was issued last Tuesday.
The rating agency lowered the company's rating after it announced decreasing cash flow, EBITDA and revenue. Encompass Services is suffering from a total debt-to-EBITDA ratio of approximately 6.9 times, as well as soft industry fundamentals and intense pricing pressures, according to the report. Calls to Darren Miller, cfo, were referred to a spokesman, who did not return calls by press time.