S&P downgrades Erickson

Standard & Poor’s said it lowered the corporate credit rating on Erickson Inc. to B- from B.

The agency also said it lowered the rating on the company’s second-lien debt by two notches to B- from B+ and revised the recovery rating on its second-lien debt to 3 from 2, indicating 50% to 70% expected default recovery.

The outlook is negative.

The downgrade reflects the company’s weaker-than-expected revenues and earnings due to its exposure to the energy sector and continued reduction in U.S. Department of Defense contracts, S&P said.

These trends are expected to continue as oil prices will only increase modestly through 2017, the agency said.

The company’s credit metrics are expected to remain relatively stable rather than improve as previously expected, S&P said.

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