NEW YORK — Standard & Poor's rating service last month lowered its corporate credit and subordinated debt ratings on National Equipment Services from CCC to D following NES' failure to pay $13.8 million in interest payments that were due on its subordinated notes on May 30. S&P also lowered the senior secured bank loan rating from CCC to C.

The banks exercised their right to block the interest payments on the subordinated notes. NES' credit facility is due to mature next month, and the company is working with its creditors to restructure. Failure to come to a restructuring agreement could result in a Chapter 11 bankruptcy protection filing.

Deteriorating construction market conditions, weak industrial markets, an industry-wide excess of fleet and low rental rates have all contributed to NES' poor operating performance. The company has a heavy debt burden and significant near-term maturities.

Evanston, Ill.-based NES is No. 5 on the RER 100 with 180 locations in 37 states.