Moody's cuts Great Lakes notes

Moody’s Ratings said it lowered the rating on Great Lakes Dredge & Dock Corp.'s senior unsecured notes to Caa1 from B3 and revised the company’s outlook to stable from negative.

Concurrently, the agency affirmed Great Lakes’ B2 corporate family rating, B2-PD probability of default rating and left the speculative grade liquidity rating unchanged at SGL-3.

Earlier this week, Great Lakes reported it entered into an unrated $150 million five-year senior secured second-lien credit agreement with Guggenheim Credit Funding, LLC. The company already borrowed $100 million and has an option to draw $50 million more in a delayed-draw loan.

The senior unsecured downgrade mirrors the new position in Great Lakes’ capital structure, Moody’s said.

The improved outlook reflects the new loan improving liquidity, an improved backlog with a domestic dredging backlog of $1.04 billion on Dec. 31 up from $368 million at the end of 2022, the agency said.

“Great Lakes' Moody's adjusted EBITDA improved to $103 million in 2023, from the trough levels of $49 million in 2022. Moody's expects further improvement in 2024 as the company executes on its strong backlog,” Moody’s said.

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