S&P lifts Alion Science loan

S&P said it revised the outlook on Alion Science and Technology Corp. to positive from stable and affirmed the B- issuer credit rating.

The agency also raised the issue-level rating on the company's enlarged first-lien term loan to B from B-. S&P revised the recovery rating to 2 from 3, indicating an expectation of substantial recovery (70%-90%; rounded estimate: 70%) in a default scenario.

The agency also affirmed the B+ issue-level rating on the company's $40 million revolving credit facility. The 1 recovery rating is unchanged, indicating an expectation of a very high recovery (90%-100%; rounded estimate: 95%) in a default scenario.

Alion plans to acquire MacAulay-Brown Inc. using proceeds from the additional debt and an equity infusion from its sponsor.

The agency said the outlook revision reflects expectations that credit ratios should improve in fiscal 2019 ending Sept. 30 due to the deleveraging impact of the MacAulay-Brown acquisition resulting from the large equity component of the financing and a return to revenue and earnings growth at the legacy operations.

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