S&P cuts URS Holdco

S&P said it trimmed its ratings for URS Holdco Inc. and its senior secured debt to CCC+ from B-. The 3 recovery rating on the secured debt remains unchanged, indicating an expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in default. The agency also removed the ratings from CreditWatch with negative implications, where they were placed on April 10.

“The downgrade reflects URS’ significant earnings decline in 2020 and its weakened credit metrics. The company provides vehicles transportation services for auto customers, including auto original equipment manufacturers (OEMs), retailers and dealers, mainly in the U.S. While the company has substantial end-market concentrations in the auto and commercial vehicle industries, the acquisition of Team Drive-Away in the heavy truck segment provides some diversification for the business,” S&P said in a press release.

The agency said it expects incremental improvements in 2021, but that leverage will stay elevated at unsustainable levels.

The outlook is negative.

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