Fitch affirms Tutor Perini

Fitch Ratings said it affirmed Tutor Perini Corp.'s long-term issuer default rating at B+, senior first-lien secured revolver at BB+/RR1 and senior unsecured notes and senior unsecured convertible notes at BB-/RR3.

The outlook is stable.

The agency said that Tutor Perini's long-term issuer default rating is supported by the company's strong backlog growth since the end of 2016 and Fitch's expectation that the company will generate positive cash flow over the next few years.

The ratings are further supported by the company's improving operating and EBITDA margins, especially within the specialty contractors segment, strong market position within the United States and meaningful customer and project diversification, Fitch added.

Rating concerns include the company's limited liquidity given the amount of the seasonality and cyclicality in the engineering and construction industry, potential for contract cancellations in the event of a cyclical or secular downturn and potential for project delays or cost overruns, particularly given the various large, fixed-price contracts on which the company operates, the agency said.

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