S&P ups Synagro

Standard & Poor's said that it raised the corporate credit rating on Synagro Technologies Inc. to B- from CCC+ and the ratings on Synagro's senior secured and second-lien debt issues by one notch. S&P lowered the recovery ratings on the company's first-lien facilities to 4 from 3 following a reassessment of recovery prospects in a default scenario. The 4 recovery rating for the first-lien lenders indicates the expectation of average recovery (30%-50%) in the event of a payment default.

The outlook is stable.

The ratings on Synagro reflect the company's highly leveraged financial risk profile, marked by high debt and weak cash flow protection measures, the agency said. Although the essential nature of its services and the high percentage of sales under long-term contracts provide stability to the top line, Synagro derives more than 90% of its revenues from municipalities, which still face budgetary pressures.

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