Moody’s cuts Triumph, rates notes B2

Moody’s Investors Service said it assigned a B2 rating to Triumph Group, Inc.’s proposed first-lien senior secured notes and lowered the company’s ratings, including the company’s corporate family rating to Caa3 from Caa2 and probability of default rating to Caa3-PD from Caa2-PD.

Concurrently, Moody’s downgraded its ratings for Triumph’s senior secured second-lien notes to Caa2 from Caa1 and senior unsecured notes to Ca from Caa3.

Proceeds will be used to repay borrowings and terminate the company’s revolving credit facility, with excess cash to be carried on the balance sheet in support of requisite liquidity needs over the coming years.

“The downgrades reflect our assertion of rising default risk over the next few years given the company’s deemed unsustainable leveraged capital structure and the multi-year recovery of the aerospace industry as anticipated,” said Eoin Roche, a Moody’s vice president and senior analyst covering Triumph, in a press release.

“This is notwithstanding the temporarily improved liquidity profile that Triumph will enjoy pending successful completion of its secured debt financing and targeted asset dispositions, albeit which we believe will again be substantially depleted over the coming years and is likely to be insufficient to fully refinance maturing debt obligations,” added Roche.

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