Travelport is facing its second hit from a major credit agency in the space of a month after Standard and Poor's lowered the technology giant's rating today.
In a note issued to investors, S&P says Travelport faces "increased refinancing risk and tightening financial covenant headroom", based once again on concerns over the company's upcoming repayment of its $693 million PIK (payment in kind) loan to its private equity backer Blackstone, through holding company Travelport Holdings.
S&P's move follows that of Moody's in August this year, a move also triggered by similar concerns over the PIK loan.
Travelport has a "weak liquidity profile" due to "significant near-term refinancing risk" around the PIK issue, S&P says. As a result, Travelport was today given a negative rating on S&P's CreditWatch list.
S&P says there is "increased risk" that Travelport will not be able to honour its promise to repay the PIK by March 2012.
The S&P note says:

"We do not currently believe that the company will be able to secure sufficient cash resources either from operations or disposals to repay these notes, and will therefore need to find a refinancing solution.
"In our opinion, this may be difficult given Travelport's highly leveraged capital structure, partially pledged asset base, and currently weak debt capital markets."
Travelport has once again stated it is business-as-usual, re-issuing the statement produced for the Moody's report in August:

"Our credit ratings go up and down over time, similar to other companies and ratings changes have no impact on our business operations or contracts. Travelport has strong free cash flow and we are aware of both our covenant limits and debt maturities and will continue to evaluate our capital structure."
The company recently paid down some of its debt through the sale of its GTA accommodation division to Kuoni for $665 million.