Moody's Investors Service lowered the rating of Penton Media's $372 million of credit facilities to B2 from B1 due to the company's poor operating performance. The severity of a revision in cash flow guidance and the proximity of the revision to previous modifications led Moody's belief that management's visibility is severely limited at the present time, which remains a large concern for the rating agency.
Supporting the rating is an infusion of equity, which would improve the company's balance sheet and strengthen its liquidity position. Moody's notes this could lead to a stabilization of the ratings. Headquartered in Cleveland, Penton Media is a trade show operator and publisher within the Internet/Broadband-related industry. Calls to Joseph NeCastro, cfo, were referred to Mary Abood, director of corporate communications. "We're certainly aware of the action, and our sector is under very difficult economic pressure," she said. "We are taking aggressive action on the cost side of the business to address the market situation, and we expect the benefits to start appearing next year."
* Moody's downgraded Exide Technologies' debt rating to Caa2 from B3 due to the company's liquidity crisis. Approximately $900 million of senior secured bank debt is affected. According to Exide's latest 10-Q report, the company was in non-compliance with certain financial covenants under the senior secured bank credit agreement for the last 12 months. Exide has obtained a waiver from the bank group, but management already anticipates the need to seek additional waivers or amendments to various financial covenant requirements. The Princeton, N.J.-based company is a global leader of stored electrical energy solutions.
Supporting the rating, the company has retained Jay Alix & Associates to support its restructuring efforts. Lisa Donahue, a principal of Jay Alix, has been named Exide's chief financial officer and chief restructuring officer. The firm's focus is on quickly generating better cash flow performance, through a combination of improved reporting; more stringent working capital management; and a thorough review of the company's operating efficiency. Donahue did not return calls for comment.
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* US Unwired's $530 million in credit facilities were upgraded to B1 from B2 due to the company's completion of its network build out. The Lake Charles, La.-based company is an affiliate of Sprint PCS. Jerry Vaughn, cfo, who said of the rating, "We're very excited and feel it's something we deserve." "I'm happy Moody's has seen the wisdom to separate wireless from CLECs and rate us independently. It's a step in the right direction."
Also affecting the rating is the combination of positive EBITDA, reduced capital requirements and low utilization of its senior secured credit facilities, which puts US Unwired in a strong liquidity position, according to the rating.