S&P lowers Wesco Aircraft

S&P said it lowered the ratings on Wesco Aircraft Holdings Inc. and its first-lien debt to CCC+ from B-. The recovery rating on the debt remains 4. Also, the agency trimmed the rating on Wesco’s unsecured debt to CCC- from CCC. The recovery rating of 6 is unchanged. Finally, S&P cut parent Wolverine Intermediate Holding Corp.'s unsecured notes to CCC- from CCC. The recovery rating remains 6.

“Wesco's credit metrics will likely remain very weak into 2021 as a result of the coronavirus pandemic. Wesco operates as a parts distributor to commercial aerospace and defense OEMs and to the aftermarket. Commercial OEM represented about 50% of pre-Covid revenue and commercial aftermarket was about 10%-15%. Boeing Co. and Airbus S.E. have reduced build rates on most platforms by 30%-40%, and we expect them to remain at this reduced level through 2021,” S&P said in a press release.

The agency said it forecasts debt to EBITDA of around 10x, versus its previous forecast of 7.5x-8x.

The outlook is negative.

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