Moody's changes Great Lakes Dredge & Dock view to negative

Moody's Investors Service said it changed Great Lakes Dredge & Dock Corp.'s outlook to negative from stable, downgraded its speculative grade liquidity rating to SGL-3 from SGL-2 and affirmed its corporate family rating at B2, probability of default rating at B2-PD and $250 million of 7 3/8% senior notes due 2019 at B3 (LGD-4, 58%).

The agency said the outlook change is in response to lower-than-expected earnings performance during the latter half of 2012, delays in filing of financial statements because of pending restatements and internal control weaknesses as well as uncertainty regarding the level of operating performance improvement likely to occur in 2013.

The lowering of the speculative grade liquidity rating reflects the deterioration in the company's liquidity profile that Moody's anticipates over the next 12 to 18 months.

The affirmation of Great Lakes' B2 corporate family rating reflects the company's strong market position in the domestic dredging industry and the high barriers to entry afforded by the Jones Act and the sizable amount of capital required to enter the dredging business, the agency said.

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