November 8, 2012 / 10:32 PM / 5 years ago

TEXT-S&P revises W3 Holdings recovery rating to '3' from '4'

Nov 8 - Standard & Poor's Ratings Services said today that it revised its
recovery rating on Houston-based W3 Holdings Inc.'s (W3) senior secured credit
facilities to '3', indicating our expectation of meaningful (50% to 70%)
recovery in the event of a payment default, from '4'. The issue-level rating on
W3's senior secured credit facilities remains 'B-'.

The improved recovery rating reflects a higher estimated emergence value for 
W3 due to improved market conditions that we expect will support a sustained 
higher value for the company. 

The 'B-' corporate credit rating and stable outlook on W3 incorporate the 
company's aggressive financial leverage and its narrow business focus and 
small scale in the fragmented market for safety equipment and maintenance 
services. W3 derives approximately 50% of its revenue from the upstream energy 
market, 30% from the downstream energy market, and about 15% from the 
petrochemical market. The ratings also reflect W3's adequate near-term 
liquidity, its low capital spending requirements, the low volatility of demand 
for its products and services, and its diversified customer base. 

RELATED RESEARCH AND CRITERIA
     -- Criteria Guidelines For Recovery Ratings, Aug. 10, 2009.
     -- Corporate Ratings Criteria 2008, published April 15, 2008.

RATINGS LIST
W3 Holdings Inc.
 Corporate credit rating      B-/Stable/--

Recovery Rating Revised
                              To          From
 Senior secured               B-          B-
   Recovery rating            3           4


Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.

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