Fitch: Aegis outlook negative

Fitch Ratings said it revised Aegis Ltd.'s outlook to negative from stable and affirmed the long-term foreign-currency issuer default rating at BB-.

The revision in outlook reflects higher-than-expected leverage and also risks as to the company's ability to maintain its operating margins in the current global environment, which could further negatively impact Aegis's liquidity and credit profile, according to the agency.

For the financial year ended March, Aegis's funds from operations-adjusted leverage, contrary to expectations, continued to exceed 4.0x (4.4x in fiscal 2011) due to higher adjusted debt, the agency noted.

The rating reflects Aegis's geographically and vertically diversified revenue with low client concentration risk, its strong counterparties and a high degree of customer loyalty, Fitch said. Constraints include Aegis's small size, limited track record of organic growth and volatility in operating margins, the agency said.

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