S&P cuts United Site Services

S&P said it downgraded its ratings for PECF USS Intermediate Holding III Corp. (United Site Services) and its senior secured debt to CCC+ from B-. The agency also lowered the ratings on the senior unsecured notes to CCC- from CCC. The recovery ratings on the secured and unsecured debt remain at 3 and 6, respectively.

“The downgrade reflects a meaningful weakening in EBITDA and free cash flows over the past few quarters following the October 2021 recapitalization, leading to debt leverage deteriorating to unsustainable levels,” S&P said in a press release.

The agency said it expects United Site to end 2022 with leverage of about 9x. “The weaker-than-expected EBITDA, coupled with working capital outflows and spending on growth capex and acquisitions has led to our revised expectations that free cash flow will be modestly negative in 2022.”

The outlook is stable.

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