Standard & Poor's Ratings Services said today that it placed the single-'B'-minus corporate credit and senior secured debt ratings and the triple-'C' subordinated rating of Neff Corp. on CreditWatch with negative implications.
"The action followed the announcement by the company that it was not in compliance with its leverage covenant on its credit agreement, because of weakness in the company's financial performance in the third quarter," said John Sico, S&P credit analyst.
Miami, Fla.-based Neff, No. 9 on the RER 100, has about $280 million in debt outstanding. Operating income in the third quarter of 2002 fell by 27 percent from the year-earlier level because of weaker equipment-rental revenues.
The company has virtually no cash on hand. While Neff is about to begin negotiating with its lenders to obtain covenant relief, banks have not yet approved any amendment and may not do so before an interest payment of about $8 million is due on Neff's subordinated notes on Dec. 1.