Moody's cuts URS Holdco

Moody's Investors Service said it downgraded the ratings of URS Holdco, Inc. (United Road), including the corporate family rating and senior secured rating to Caa1 from B3 and the probability of default rating to Caa1-PD from B3-PD.

“The downgrade reflects Moody's expectation of weak credit metrics impacted by the semiconductor shortage in the automotive sector, which has constrained volumes and revenue, especially in the transportation of new vehicles for URS. The downgrade also reflects cost headwinds stemming from higher third-party driver costs, rising fuel costs, as well as additional lease expenses after the company did a number of sale-leaseback transactions to shore up liquidity in 2020,” the agency said in a press release.

Moody’s noted that at March 31, debt-to-EBITDA was 13.4x.

The outlook is negative.

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