Moody's affirms Synchronous

Moody's Investors Services said it affirmed the Caa1 corporate family and probability of default ratings of Synchronous Aerospace Group.

The agency also said it lowered the company's senior secured revolver and term loan ratings to Caa1 (LGD 4, 50%) from B3 (LGD 3, 34%), in line with the prior stress-scenario entity recovery rate assumption.

The outlook was revised to stable from negative.

The change in outlook reflects a view that the risk of a near-term covenant default by Synchronous has declined based on expectations that the company's performance is likely to improve as a result of higher build rates anticipated by some of its main customers in the commercial aerospace sector, Moody's said.

The agency noted that although headroom under financial covenant ratio covenants in the company's bank agreements has improved, the amount of cushion is likely to remain tight.

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