Fitch cuts STG Logistics, loans

Fitch Ratings said it lowered its ratings for Reception Purchaser LLC’s revolver and term loan to B+/RR3 from BB-/RR3. The agency also downgraded its long-term issuer default ratings for the issuer and Reception Mezzanine Holdings LLC (STG Logistics) to B from B+.

“The actions reflect near-term deterioration in credit metrics that remain weaker than previously expected over the medium term. The forecast results from weaker intermodal and freight markets with limited visibility to recovery in the next few years. Fitch also considers cash-funded M&A during the downturn that reduced liquidity and financial flexibility,” the agency said in a statement.

Fitch said it expects STG’s free cash flow to fluctuate around lowly positive to negative through 2025 while coverage metrics hover in the low-to-mid 1x. Leverage will be high, peaking around 8x in FY2023 before retreating toward 6x.

“Fitch believes liquidity will remain manageable given cash and revolver availability and long-dated maturities, however; capital allocation decisions could pressure liquidity,” the agency said.

The outlook is negative.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.