Tweddle Holdings Inc. Ratings Downgraded To #CCC# and Withdrawn At Issuer Request

Stocks and Financial Services Press Releases Wednesday June 20, 2018 09:24
CHICAGO--20 Jun--S&P Global Ratings
CHICAGO (S&P Global Ratings) June 19, 2018--S&P Global Ratings today lowered its corporate credit rating on Michigan-based Tweddle Holdings Inc. to 'CCC' from 'CCC+'. The rating outlook is negative.

At the same time, we lowered our issue-level rating on Tweddle Group Inc.'s $225 million secured term loan to 'CCC' from 'CCC+' and our recovery rating to '4' from '3'. The '4' recovery rating indicates our expectation for average recovery (30%-50%; rounded estimate 35%) of principal in the event of a payment default. Tweddle is the ultimate parent of Tweddle Group Inc.

At the issuer's request, we are withdrawing all ratings immediately following these rating actions.

The downgrade reflects our expectation that the company will violate its senior secured credit facility's net leverage covenant in the first half of 2019 and will have insufficient cash flow to service its fixed charges by the end of 2019. That shortfall reflects steeply declining cash flow generation as a result of the major contract loss disclosed earlier this year. Because the lost client contract represented roughly 40% of Tweddle's 2017 revenue, we believe the company will be hard pressed to manage its debt service and amortization needs after 2018.

Our negative outlook reflects our expectation that Tweddle will violate its financial maintenance covenants in the first half of 2019 and probably seek to reduce its debt with a distressed exchange or in-court restructuring. We expect FOCF/debt to be in the mid-to-low single digit percentage area in 2018 and that company will have free operating cash flow deficits in 2019.

We could lower our rating if we become convinced that the company will violate its financial maintenance covenant, default on its debt payments, pursue a distressed exchange, or file for bankruptcy over the next six months. This could result from worsening revenue declines through accelerated contract loss or automotive market declines, or from poor cost management. Although unlikely, we could raise our ratings if we believe the company can significantly grow organic revenue and manage its fixed costs such that EBITDA is more than sufficient to service its fixed charges and maintain its covenant margin of compliance such that we do not anticipate a payment default or covenant violation. In this scenario the capital structure would have to become more sustainable.

Latest Press Release

African Leaders, the World Bank Group, and partners catalyze action to ensure that everyone in Africa has a digital identity by 2030

NEW YORK, September 25th, 2018 - African leaders, the World Bank Group, the United Nations, and other development partners met today on the sidelines of the UN General Assembly for the African Leaders Roundtable on Identification for Development to...

Photo Release: KBank joins hands with partners to create K PARK, a new form of lifestyle space for suburban communities

KBank unveils the first K PARK on Hathairat 33 Road by teaming up with three business giants, namely, PTT (PTT gas station and Cafe Amazon), SCG Express and Amarin Printing and Publishing to open a new lifestyle space which offers delightful experiences...

CIMB Group Chairman to Step Down by 31 December 2018

CIMB Group ("CIMB" or "the Group") today announced that its Chairman, Dato' Sri Nazir Razak, will step down from his position as Group Chairman, and all other positions within the CIMB group of companies by 31 December 2018. The CIMB Board of Directors...

KTC jointly celebrates Mo-Mo-Paradises 10th anniversary by launching Dine with chances to win an exclusive trip to Japan! with China Airlines.

Mrs. Pranaya Nithananon, Vice President - Credit Card Business, "KTC" or Krungthai Card Public Company Limited, jointly with Mr. Surawech Telan, Managing Director, Noble Restaurant Company Limited, owner of "Mo-Mo-Paradise," a dark brown broth...

Photo Release: AOT entrusts KTAM to manage provident fund for 3 years

Mr.Wichai Bunyu (2nd left), the President of The Airports Of Thailand PCL. Employee's Registered Provident Fund (AOT) and Mr. Visit Balee (1st right), Fund committee recently held a Provident Fund management contract signing ceremony with Mr. Veera...

Related Topics