S&P: Brand Energy outlook negative

Standard & Poor's said it revised the outlook on Brand Energy & Infrastructure Services to negative from stable and affirmed its B corporate credit rating.

"The negative outlook reflects our view that Brand's EBITDA margin will remain well below its historical midteens average at least through 2010, leaving last-12-months leverage above our 6.0x target through most of 2011," S&P analyst Marc Bromberg said in a statement.

S&P said it considers Brand's business profile to be vulnerable.

Despite a strong maintenance component of about 65% of revenues, some of Brand's customers have pushed back maintenance capital expenditures because of the poor economy, the agency noted.

The negative outlook reflects expectation that Brand will encounter pricing pressure and near-term maintenance project delays due to weak end-market conditions, leaving EBITDA margins well below the historical midteens range, the agency said.

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