S&P cuts Triumph Group two notches

S&P said it lowered its corporate credit rating on Triumph Group Inc. to B from BB-. The outlook is stable.

At the same time, S&P lowered its issue-level ratings on the company's first-lien credit facility to BB- from BB+. The 1 recovery rating is unchanged, indicating an expectation for very high recovery (90% to 100%; rounded estimate: 95%) in a default scenario.

Additionally, S&P said it lowered the issue-level rating on the company's senior unsecured debt to CCC+ from B, consistent with the lowering of the corporate credit rating. The 6 recovery rating is unchanged, indicating an expectation for negligible recovery (0%-10%; rounded estimate: 0%) in a default scenario.

“The two notch downgrade reflects updated company guidance on earnings and cash flow for fiscal 2018 (ending March 31, 2018), which will result in credit metrics that are materially weaker than our previous expectations. Furthermore, although the company is making progress in fixing problem programs and improving its cost structure, we no longer believe EBITDA margins will return to historical levels in the mid- to high-teens percentage area and will likely remain below 10% for at least the next few years,” S&P said in a news release.

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