S&P Places Quality Distribution (QLTY) on CreditWatch Negative Following Merger Announcement

Standard & Poor's Ratings Services said today that it has placed its ratings on North American tank truck operator Quality Distribution (Nasdaq: QLTY) on CreditWatch with negative implications.

"The CreditWatch placement follows Quality's announcement that it has entered into a definitive agreement to be acquired by funds advised by Apax Partners in a transaction valued at approximately $800 million, including the assumption of debt," said Standard & Poor's credit analyst Michael Durand. "The transaction is expected to close in third-quarter 2015, subject to customary closing conditions including shareholder and regulatory approvals."

This transaction could increase the company's debt levels and weaken its credit measures, which could lead us to reassess Quality's financial risk profile.

We will continue to monitor developments related to the transaction and resolve the CreditWatch placement when more information regarding the new capital structure becomes available.

Upon the completion of our review, we could lower the ratings if we believe the company's financial risk profile will be materially weaker for an extended period as a result of the proposed transaction. Alternatively, we could affirm our ratings on Quality if we believe that the company's financial risk profile has not meaningfully changed.

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