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S&P cuts Hoover Group
S&P said it downgraded Hoover Group Inc. and its first-lien credit facilities to CCC- from CCC. The 3 recovery rating on the facilities is unchanged.
“We believe the likelihood of a default or distressed restructuring has increased, considering the company's January 2021 maturity, high financial leverage, and exposure to oil and gas exploration activity. We expect onshore and offshore oil and gas (O&G) exploration activity to slow considerably in 2020 as a result of weak demand and strong supply,” S&P said in a press release.
The agency said it forecasts Hoover will generate modest funds from operations over the next 12 months. Combined with cash of $40 million at March 31, this won’t be enough to repay the first-lien facilities at maturity in January, S&P said.
The outlook is negative.
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