S&P turns Peraton view to negative

S&P said it revised its outlook for Peraton Corp. to negative from stable and affirmed the B+ issuer rating.

“Revenue headwinds in fiscal 2022 have contributed to higher-than-expected leverage. Peraton's S&P Global Ratings' adjusted leverage for the last 12 months (LTM) ended September 2022 is 8.3x. This is the first LTM period to include the full contribution of its 2021 acquisitions. We expect leverage in 2022 to be in excess of the 7.5x downgrade threshold as a function of lower S&P Global Ratings' adjusted EBITDA arising from its significant revenue shortfall, with the possibility that leverage could be sustained above 7.5x for the next six to 12 months,” the agency said in a statement.

Part of the reason for the negative outlook is uncertainty about if the company will prioritize debt repayment and the potential that EBITDA will not increase enough to lower leverage to levels consistent with the rating, S&P explained.

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