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Moody’s affirms TurboCombustor at Caa1
Moody’s Investors Service affirmed its ratings on TurboCombustor Technology, Inc. including the corporate family rating at Caa1, the probability of default rating at Caa2-PD and the senior secured term loan at Caa1. It also assigned a Caa1 rating to the senior secured revolver due December 2020, following a maturity extension from December 2018. The outlook is stable.
Moody’s said the rating reflects TurboCombustor’s small scale, high financial leverage, tight liquidity profile and pronounced customer concentration.
It anticipates weak credit metrics through the end of 2018 as the company continues to face a number of earnings headwinds including high restructuring and new product introduction costs, elevated scrap rework charges and declining sales from legacy platforms.
At the same time, TurboCombustor has content on several key engine platforms that will dramatically ramp up in production over the next 18 to 24 months.
The stable outlook acknowledges TurboCombustor’s sizable content on key growth engine platforms which is expected to translate into topline growth and a gradual improvement in credit metrics over the intermediate term.
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