S&P rates Railworks, loan B

S&P said it gave B ratings to Railworks Corp. and its $230 million first-lien senior secured term loan due 2027. The recovery rating on the first-lien term loan is 3. The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in default.

“The rating on RailWorks Corp. reflects our view of its relative size, end-market concentration, and narrow geographic scope in the broader global engineering and construction services industry. In addition, we believe the company is exposed to project losses through its high percentage of fixed-price contracts in backlog,” S&P said in a press release.

Proceeds will be used to pay an $80 million dividend to shareholders, refinance debt and finance a tuck-in acquisition

The outlook is stable. The outlook reflects the view Railworks will maintain stable margins over the next 12 months, the agency said.

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