S&P lowers Triumph Group

S&P said it lowered its corporate credit rating on Triumph Group Inc. to B- from B.

The outlook is stable.

At the same time, the agency lowered the issue-level rating on the company's secured debt to B+ from BB-. The 1 recovery rating is unchanged and reflects expectations of a very high recovery (90%-100%; rounded estimate 95%) in a default scenario.

S&P also lowered the issue-level rating on the company's unsecured debt to CCC+ from B-. The 5 recovery indicates expectations of a modest recovery (10%-30%; rounded estimate 25%) in a default scenario.

“The downgrade reflects that earnings and cash flows in fiscal 2019 (ending March 31, 2019) will be well below our previous expectations,” the agency said in a news release.

“We now expect debt to EBITDA above 10x in fiscal 2019 compared to our previous forecast of 7.0x-7.5x due to issues improving profitability on struggling programs and lower margins on new programs.”

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