Oct 15 - Standard & Poor's Ratings Services today said it assigned its
'CCC+' issue-level rating and '6' recovery rating to Calgary, Alta.-based
Tervita Corp.'s proposed US$290 million senior unsecured notes. The '6' recovery
rating indicates our expectation of negligible (0%-10%) recovery in the event of
a default. The company will use the proceeds to repay borrowings under its
revolving credit facility. (For the complete recovery analysis, see Standard &
Poor's recovery report on Tervita Corp. to be published on RatingsDirect on the
Global Credit Portal following this media release.)
"The ratings on Tervita reflect our view of the company's 'fair' business risk
profile and 'highly leveraged' financial risk profile," said Standard & Poor's
credit analyst Aniki Saha-Yannopoulos.
The ratings take into account our assessment of the company's high debt
leverage due to management's aggressive financial policy, participation in the
competitive and cyclical oilfield services market, and lack of long-term
contracts. The ratings also incorporate our positive assessment of Tervita's
relatively stable operating margins and integrated strategy that provides
cross-selling opportunities. In our opinion, the company's financial risk
profile constrains the ratings.
RELATED RESEARCH AND CRITERIA
Criteria Guidelines For Recovery Ratings On Global Industrials Issuers'
Speculative-Grade Debt, Aug. 10, 2009
Corporate credit rating B/Negative/--
Proposed US$290 mil. sr. unsec. nts CCC+
Recovery rating 6