Moody's ups Great Lakes Dredge, rates notes B2

Moody's Investors Service said it upgraded Great Lakes Dredge & Dock Corp.'s corporate family rating to B1 from B2 and its probability of default rating to B1-PD from B2-PD. Great Lakes’ speculative grade liquidity remains unchanged at SGL-2. Concurrently, Moody's assigned a B2 rating to Great Lakes planned $325 million of senior unsecured notes.

"The upgrade of Great Lakes reflects our expectation its credit metrics will remain strong for its rating due to the positive near-term dredging sector funding dynamics and its relatively conservative financial policies. The upgrade incorporates the likelihood that Great Lakes' earnings will vary based on cyclicality, government funding priorities, and periodic operational issues and it will still require sizable investments in equipment and vessels, but its $178 million cash balance and ABL revolver availability provide ample credit support through the business cycle," said Michael Corelli, a Moody's senior vice president and lead analyst for Great Lakes Dredge & Dock, in a press release.

The company plans to use the proceeds to retire its $325 million senior unsecured notes due 2022. The notes’ rating will be withdrawn when they are redeemed.

The outlook is stable.

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