S&P upgrades Emeco

S&P said it upgraded its ratings for Emeco Holdings Ltd. and its senior secured debt to B+ from B. The recovery rating on the debt remains at 4. The outlook is stable.

“We raised the ratings based on our expectation that Emeco's cash flows and credit metrics will continue to improve over the next 12 months. The company continues to demonstrate good operating performance, generating strong EBITDA growth. As a result, we now expect the company's adjusted debt to EBITDA to be between 1.5x and low 2x and free operating cash flow to be strong over the next 12 months,” said S&P in a press release.

The company's first call date of its senior secured $322.1 million bond occurs in March, with a 2022 debt maturity. The B+ rating incorporates S&P’s expectation the debt refinancing will result in a stronger balance sheet with lower debt leverage, an extended maturity and improved interest coverage measures over the medium to long term.

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