S&P lowers STI Infrastructure

Standard & Poor’s said it lowered the corporate credit rating on STI Infrastructure Sarl to CCC+ from B-.

The outlook is negative.

The agency also said it lowered the rating on the company’s $215 million term loan to CCC+ from B-. The 3 recovery rating on this facility is unchanged, indicating 50% to 70% expected default recovery.

Synagro, which is a unit of STI Infrastructure, has continued to experience weak profitability during the first half of 2015, which led to the downgrade, S&P said.

The downgrade also considers a view that Synagro’s credit measures will remain weak and while the company might not face a payment default within the next 12 months, S&P said it believes its operations are vulnerable and dependent upon favorable business, financial and economic conditions to meet its financial commitments.

The negative outlook reflects the continued operational uncertainties that the company faces in some of its business segments and the restructuring charges expected later this year.

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