Moody's: Shaw view to stable

Moody's Investors Service said it affirmed the Shaw Group Inc.'s Ba1 corporate family rating and Ba1 senior unsecured rating.

The outlook was changed to stable from positive as recent contract execution challenges have lessened the chances that the company's earnings will support a ratings upgrade over the next 12 to 18 months, Moody's said.

The agency also said it assigned a SGL-2 speculative-grade liquidity rating to the company, which was driven by the company's significant cash balances.

Moody's also said it lowered Shaw's probably of default rating to Ba2 from Ba1 as the planned exercise of its put option in Westinghouse to Toshiba will effectively leave its bank credit facility as the sole debt instrument in the company's capital structure.

The ratings are heavily influenced by the significant project execution risks associated with its fixed-price construction contracts, the agency said, coupled with the company's thin operating margin and meaningful cyclical exposure.

These risks are mitigated by Shaw's solid balance sheet, significant order backlog and its strong market position as a leading contractor to an assortment of end markets, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.