S&P affirms Tervita

Standard & Poor’s said it affirmed its B- long-term corporate credit rating on Tervita Corp. The outlook is stable.

At the same time, S&P affirmed its B- issue-level rating and 3 recovery rating on the secured notes; and its CCC issue-level rating and 6 recovery rating on the company’s subordinated notes. The 3 recovery rating indicates an expectation of meaningful (50%-70%; lower half of the range) recovery in a default scenario, while the 6 recovery rating indicates an expectation of negligible (0%-10%) recovery.

“The ratings on Tervita reflect our view of the company’s ‘highly leveraged’ financial risk profile and associated high fixed charges, negligible funds from operations generation, and forecast negative free operating cash flow throughout our cash flow forecasting period,” said S&P credit analyst Michelle Dathorne in a news release.

These weaknesses, which hamper the ratings, are somewhat tempered by the scope of Tervita’s operations, the company's ability to generate fairly stable EBITDA and margins at peaks and troughs of the hydrocarbon price cycle, and an “adequate” liquidity profile, S&P added in its news release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.