TRC Cos. Inc. Senior Secured Debt Rating Affirmed Following Announcement Of $10 Million Term Loan Add-On

Stocks and Financial Services Press Releases Friday May 26, 2017 08:56
NEW YORK--26 May--S&P Global Ratings
NEW YORK (S&P Global Ratings) May 25, 2017--S&P Global Ratings today affirmed its 'B' issue-level rating on TRC Cos. Inc.'s senior secured credit facilities (revolver and term loan).

Our '3' recovery rating on the facilities remains unchanged, indicating our expectation for meaningful recovery (50%-70%; rounded estimate: 50%) in the event of a payment default. TRC plans to issue a $10 million add-on to its proposed $315 million first-lien term loan (totaling $325 million) and will use the proceeds from the add-on to place additional cash on its balance sheet.

The upsizing does not affect our ratings on the company's senior secured credit facilities and does not change our forecast that the company will maintain a debt-to-EBITDA metric of about 5x over the next 12 months and a free operating cash flow-to-debt ratio of more than 5%.

Our ratings on TRC reflect the company's position as a niche engineering, consulting, and construction management firm that participates in multiple end markets across the U.S.
Our ratings also incorporate the risks associated with its controlling ownership by a private-equity sponsor, reflecting the potential that its financial sponsor may increase its leverage over time.
RECOVERY ANALYSIS Key analytical factors We affirmed our 'B' issue-level rating on the company's senior secured credit facilities (revolver and term loan). The '3' recovery rating remains unchanged.
Our default scenario assumes macroeconomic weakness across TRC's key end markets that leads to prolonged deferrals or cancellations of numerous projects, which meaningfully impairs the company's earnings.
We value the company on a going concern basis using a 5x multiple of our projected emergence EBITDA.

Simulated default assumptions Simulated year of default: 2020EBITDA at emergence: $41 millionEBITDA multiple: 5xSimplified waterfall Net enterprise value (after 5% admin. exp.): $194 millionValuation split (obligors/nonobligors): 100%/0%Collateral value available to secured debt: $194 millionSecured first-lien debt claims: $382 million--Recovery expectations: 50%-70% (rounded estimate: 50%)Collateral available to unsecured and subordinated claims: $0 millionUnsecured and subordinated claims: $194 million--Recovery expectations: Not applicableNote: All debt amounts include six months of prepetition interest.

Latest Press Release

Fitch Affirms Standard Chartered Bank (Thai) at #A-#; Outlook Stable

Fitch Ratings has affirmed Standard Chartered Bank (Thai) Public Company Limited's (SCBT) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) at 'A-' with a Stable Outlook. At the same time, the agency has affirmed SCBT's National...

Photo Release: KBank recognized as having the highest corporate brand value in the banking business category 2nd consecutive year

At Sukree Kaewcharoen Auditorium, the Stock Exchange of Thailand (SET), Ms. Kattiya Indaravijaya, KBank President, recently represented KBank to receive the "Thailand's Top Corporate Brand Values 2018" award in the banking business category from...

MicroBitcoin Open Source Community เซ็นสัญญากับสมาพันธ์แรงงานในเกาหลี เปิดโอกาสให้แรงงาน 1.5 ล้านคนได้ใช้เงินดิจิทัล

MicroBitcoin Open Source Community เซ็นสัญญากับสมาพันธ์แรงงาน Korea Association of Care Workers (KACW) เพื่อนำสกุลเงินดิจิทัล MicroBitcoin มาใช้ สัญญานี้ลงนามร่วมกันสามฝ่าย ได้แก่ MicroBitcoin Open Source Community, KACW และ Bluequotient...

MicroBitcoin Open Source Community Signs an Exclusive Contract with the Korea Association of Care Workers (KACW) to Expand its Usability to One and a Half Million Users

The MicroBitcoin Open Source Community has signed a contract with Korea Association of Care Workers (KACW) to adapt the MicroBitcoin blockchain network protocol. The trilateral contract was made between the MicroBitcoin Open Source Community, the Korea...

WICE establishes a joint-venture, EUROASIA TOTAL LOGISTICS, with its holding 40% of shares to provide cross-border transport services between China, Hong Kong

WICE establishes a joint-venture, "EUROASIA TOTAL LOGISTICS", with its holding 40% of shares to provide cross-border transport services between China, Hong Kong, and South East Asia with the expectation to achieve the first year's revenue at 200 million...

Related Topics