S&P downgrades STG

S&P said it lowered its ratings for Reception Purchaser LLC (STG Logistics) and its first-lien term loan to B- from B. The loan’s 3 recovery rating (50%-70%; rounded estimate: 60%) is unchanged.

“STG's credit metrics have weakened significantly from our previous expectations amid softer freight demand and lower rates. We now forecast STG's S&P Global Ratings-adjusted leverage will be elevated above 8x for fiscal 2023 and 2024, materially higher compared to our previous expectations of mid-4x. The leverage increase stems from about 60% year-over-year decline in the company's EBITDA during the first nine months of fiscal 2023,” S&P said in a press release.

The agency said it expects STG’s operations to stay under pressure until freight rates rebound and are included in re-bid contracts.

The outlook is negative.

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