S&P cuts Constellis

S&P said it cut Constellis Borrower LLC’s issuer rating to CCC+ from BBB- and its second-lien term loan due 2025 to CCC- from CCC but maintained the 6 recovery rating.

Concurrently, the agency maintained the first-lien term loan’s rating at B but revised the recovery rating to 1 from 2.

“We believe the benefits of the company's restructuring and ramp-up efforts have not been fully realized and will continue through 2021 and thus, we expect little to no year-over-year growth in revenue for 2021. Therefore, we forecast credit metrics to be significantly weaker than our earlier estimates, with debt to EBITDA in the 10x-15x range in 2021 (versus our earlier expectations of below 7x). We expect funds from operations (FFO) to debt to remain in the low-single-digit percent area throughout our forecast period. We view these credit metrics as unsustainable over the long term,” S&P said in a press release.

The outlook is negative.

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