S&P reviews Westway

Standard & Poor's said it placed its BB- senior secured project rating for Westway Group LLC on CreditWatch with negative implications. The recovery rating of 3 is unchanged.

In April, Westway's incumbent CEO resigned unexpectedly. Although there is a plan for an interim replacement and the agency expects a longer term solution soon, this development could be challenging for credit quality because the enterprise depends heavily on continuity and succession planning to ensure timely and cost-effective completion of growth projects.

Projects that are not completed in a timely fashion or have cost overruns can erode liquidity in the short term and weaken cash flow measures over a longer period.

"To date, we've viewed liquidity as a neutral ratings factor, but if Westway exhausts a portion of it over a more protracted development period, liquidity weakness could constrain the ratings," S&P credit analyst Michael Ferguson said in a news release.

The negative CreditWatch placement reflects S&P’s understanding that the unexpected management turnover in April 2015 could result in lower ratings, if the impact on the project's expected financial ratios is material.

The agency expects to resolve this CreditWatch placement within 90 days as it gains further clarity into the project's expected performance, especially regarding newly developed facilities.

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