S&P assigns CCC+ to Flame NewCo, rates loan B-

S&P said it assigned a CCC+ issuer credit rating to Flame NewCo, the new holding company of Phoenix Services International LLC.

At the same time, S&P assigned a B- issue-level rating to the company's secured term loan maturing in 2028. The recovery rating is 2.

After emerging from bankruptcy, Flame NewCo's debt level is about 70% lower and future profitability relies on recently renegotiated contracts, S&P said.

“However, we see risk of negative free operating cash flow (FOCF) because of limited track record of the new contracts and persistent capital spending needed to sustain its current operations and acquire new contracts to offset contracts that are ending,” the agency said in a news release.

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