S&P cuts URS to BB

Standard & Poor's said it lowered URS Corp.'s corporate credit rating to BB from BB+ and affirmed the BB+ rating with a recovery rating of 2 assigned to the company's senior secured debt, which includes a $700 million revolving credit facility, a $1.1 billion term loan A and a $300 million term loan B.

The ratings were removed from CreditWatch, where they were placed with negative implications on May 29, and the outlook is stable.

The downgrade follows the completion of the company's acquisition of competitor Washington Group International, which was partially funded with the $1.4 billion of term loan borrowings.

The agency said the ratings on URS reflect the company's increased leverage and weaker financial risk profile resulting from the Washington Group acquisition.

This is tempered by enhanced scale, business diversity and technical expertise, S&P said, adding that although the company's credit measures are likely to be stretched during the near term, the agency expects URS to steadily reduce debt so as to achieve a total debt-to-EBITDA ratio in the 3.5 times area over the intermediate term.

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