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Moody's ups MasTec to positive
Moody's Investors Service said it affirmed MasTec, Inc.'s Ba3 corporate family rating, Ba3 probability of default rating and the B1 (LGD4, 67%) rating on its $150 million of 7 5/8% senior notes due 2017 and assigned an SGL-2 speculative-grade liquidity rating.
The outlook was revised to positive from stable.
The outlook revision reflects MasTec's favorable organic growth trends driven by strength in the bulk of its end-markets and improvements in profitability that have translated into stronger credit metrics in recent periods as well as the expectation that these improvements will be sustained, the agency said.
The ratings reflect MasTec's established position as a relatively large-sized specialty contractor, moderate financial leverage with a debt-to-EBITDA ratio below 3.0 times, generally improving operating margins, a high proportion of revenues derived from repetitive/contractual work, strong organic growth in recent periods and favorable long-term demand fundamentals, the agency said
The ratings also consider the company's material concentration of sales from two customers, increased exposure to more volatile construction-oriented activities, ongoing acquisition risk and the prospects for weaker cash flow as cash taxes increase, the agency added.
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