S&P ups Booz Allen

S&P said it upgraded the ratings on Booz Allen Hamilton Inc. and its secured debt to BB+ from BB and the rating on the unsecured debt to BB- from B+. The 3 recovery rating on its secured debt and 6 recovery rating on its unsecured debt remain unchanged.

“Significant earnings growth should improve the company’s credit ratios in 2020. A strong government spending environment has supported solid revenue growth for Booz Allen in recent years, which provided it with a significant backlog of nearly $23 billion as of Sept. 30, 2019 (representing almost three years of forecasted revenue). Because of our expectation for continued earnings growth, we anticipate that the company’s debt to EBITDA will be in the 2.2x-2.6x range in fiscal years 2020 and 2021, which compares with our previous expectation for the 2.8x-3.2x range,” said S&P in a press release.

The outlook is stable.

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