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S&P trims Kenan Advantage
S&P said it downgraded Kenan Advantage Group Inc. to CCC+, the senior secured debt to B- and the $405 million senior unsecured notes to CCC-.
The recovery rating of 2 on the secured notes, indicating an expectation for substantial (70%-90%; rounded estimate: 80%) recovery in the event of a payment default, is unchanged. The 6 recovery rating on the unsecured notes, indicates an expectation for negligible recovery (0%-10%; rounded estimate: 5%) recovery in the event of a payment default, is also unchanged.
“We expect Kenan Advantage to experience a significant decline in freight volumes, particularly retail gasoline, as a result of Covid-19. Shelter in place orders and other restrictions on movement in many U.S. states have significantly reduced demand in Kenan’s core fuels delivery segment. As a result, we assume Kenan’s adjusted debt leverage will increase substantially above 8x in 2020,” the agency said in a pres release.
The outlook is negative.
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