Fitch changes ITT Holdings to negative

Fitch Ratings said it affirmed the BBB- long-term issuer default rating and senior unsecured rating for ITT Holdings LLC and revised the outlook to negative from stable.

“Over the last 10 years, ITT's storage assets have operated at utilization rates that averaged between 92% and 94%, which allowed the company to generate stable cash flows,” Fitch said in a news release.

“In early 2018, the company reported that approximately 3.4 million barrels of storage capacity (just under 8% of total capacity) were not renewed in the Lower Mississippi River and this is expected to result in utilization in the mid-80s% for the year.

“These contracts are largely related to heavy and residual oils. Some of this demand is a result of a structural decline driven by the International Maritime Organization (IMO) 2020 rules for cleaner bunker fuels as well as lower needs from U.S. refineries.

“ITT is spending capital over the next three years to repurpose a portion of its storage for heavy and residual fuel to store cleaner fuel products. Once the tanks have been repurposed, Fitch expects to see an improvement in utilization,” the agency added in the release.

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