The following is a press release from Moody’s Investors Service:
Moody’s Lowers Ratings Of Wci Communities; Outlook
Approximately $650 Million of Debt Securities Affected
New York, October 06, 2006 — Moody’s lowered the ratings of WCI Communities, Inc. (“WCI”), including its corporate family rating to Ba3 from Ba2 and the ratings on its senior subordinated notes to B1 from Ba3. This concludes the review that was commenced on July 24, 2006. The ratings outlook is negative.
Lots of reasons why ….
Followed by the conclusion
Going forward, the ratings could be reduced again if the company were unwilling or unable to reduce debt leverage at year end to the mid-to-high 50% range, if earnings turned sharply negative, or if covenant compliance became problematic. The ratings outlook could stabilize if the company were to place greater emphasis on building liquidity and reducing outstanding debt, were to stay profitable in the coming quarters, and were able to meet its debt covenant tests with some headroom.
The following ratings were affected:
Corporate family rating changed to Ba3 from Ba2
Probability of default rating changed to Ba3 from Ba2
Senior sub debt ratings changed to B1 from Ba3
LGD (Loss-given-default) assessment and rate on the
senior sub debt unchanged at LGD5, 81%.
Now I’m not one to make merry of one’s misfortune, but I’ll definitely try and make a buck off it!