S&P keeps Great Lakes Dredge on watch

Standard & Poor's said that its ratings on Great Lakes Dredge & Dock Corp. will remain on CreditWatch with negative implications, where they were placed June 10. This includes the CCC+ corporate credit and senior secured debt ratings on the company as well as the CCC- subordinated debt rating.

S&P said the continued CreditWatch listing reflects S&P's concern about the company's continuing liquidity and cash flow generation issues.

Great Lakes has temporarily improved its liquidity profile by amending its credit facility to address short-term working capital needs. Revolving credit facility borrowing availability has increased by $5 million, though this also represents an equal decrease in LOC capacity. As of Aug. 24, availability under the revolver is $20 million, the agency said.

Although Great Lakes was able to meet its June 15 bond interest payment, its liquidity position remains tight, as the additional availability will exist only until Oct. 31, 2005, or until the company can collect on a certain contract receivable, whichever comes first. Given the company's upcoming Dec. 22 interest payment and the volatile working capital requirements of the dredging industry, the condition of the company's liquidity is of concern, S&P said.

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