Summary: McJunkin Red Man Corp. Nov 11
Standard & Poors, November 2011
Abstract
The rating on North American steel distributor McJunkin Red Man Corp. (McJunkin) reflects what Standard & Poor's Ratings Services considers to be the combination of the company's highly leveraged financial risk profile and weak business risk profile. We assess its financial risk profile as highly leveraged, given its high debt to EBITDA level, thin interest coverage, and minimal free cash flow through the end of 2012. Its weak business risk profile, in our view, reflects McJunkin's exposure to a highly fragmented and competitive industry with cyclical end markets, volatile steel prices, and relatively slow inventory turnover, which can negatively impact profitability in periods of rapidly rising or falling prices. Still, the company does maintain geographic and customer diversity, a highly...
Companies mentioned in this report are:
- McJunkin Red Man Corp.
Action: Review
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
This product consists of a Summary Analysis: Bi-annual (at least). An abbreviated analysis containing Standard & Poor's issuer credit ratings as of the time the article was published. The analysis includes a rating rationale - the basis on which the rating was assigned - and an outlook section if the issuer is not on CreditWatch. Financial statistics are not included.
- McJunkin Red Man Corp.
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