S&P: Modular Space Corp. Ratings Lowered To 'CCC', Watch Status Revised To Negative, On Algeco Scotsman Merger Termination
OREANDA-NEWS. S&P Global Ratings said today that it lowered its corporate credit and senior secured debt ratings on modular space provider Modular Space Corp. to 'CCC' from 'B-'. At the same time, we revised the CreditWatch status of the ratings to negative from developing. The downgrade is based on the uncertainty that Modular Space Corp. will be able to refinance its asset-based credit facility that matured in June 2016. The facility had been extended while the company was engaged in discussions with Algeco Scotsman Global S. a.r. l. for the companies to combine their North American modular space operations. However, those discussions were terminated on Aug. 15, 2016. We believe Modular Space is likely to default if it is not able to refinance this facility, as the company does not have enough sources of liquidity to repay this facility; $575 million was outstanding as of Sept. 30, 2015, the last reported information. We will resolve the CreditWatch placement when there is greater clarity as to the company's efforts to refinance its credit facility. We could affirm ratings if the company is able to do so. We would lower ratings further if we come to believe that the company will be unable to refinance the facility and is likely to default.