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

mai welcomes real estate developer CMC on November 19

Market for Alternative Investment (mai) will list Chaoprayamahanakorn pcl, a leading real estate developer onNovember 19, under the ticker symbol "CMC". The company has a market capitalization at its initial public offering (IPO) of THB 3.00 billion...

KTC - Chilito Mexican Grill - Farm Factory provide members special privileges for payments made using QR Pay in the KTC Mobile app.

Mrs. Pranaya Nithananon, Vice President - Credit Card Business, "KTC" or Krungthai Card Public Company Limited, provides KTC VISA and KTC MasterCard credit card members who make payments through KTC QR Pay in the "KTC Mobile" app worth Bt. 300 or more...

Photo Release: KBank opens new flagship branch and THE WISDOM Lounge at ICONSIAM

Mr. Wirawat Panthawangkul (3rd from left), KBank Senior Executive Vice President, and Ms. Chadatip Chutrakul (4th from left), Director of ICONSIAM Co., Ltd., and Chief Executive Officer of Siam Piwat Co., Ltd., participated in the opening ceremony of...

Photo Release: CIMB Group Joins RippleNet to Power Instant Payments Across ASEAN

Tengku Dato' Sri Zafrul Aziz, Group CEO of CIMB Group (right), and Brad Garlinghouse, Ripple CEO (left) commemorating the strategic collaboration between CIMB Group and Ripple to power instant payments across ASEAN at the Singapore FinTech festival 2018...

CIMB Group Joins RippleNet to Power Instant Payments Across ASEAN

CIMB is one of the first banks to leverage blockchain technology to tap into region's USD120 billion remittance business CIMB Group ("CIMB" or "the Group") and Ripple have entered into a strategic collaboration to enable instant cross border payments...

Related Topics