S&P downgrades Senvion

S&P said it downgraded Senvion to CCC+ from B, lowering the issue ratings on its debt and revolving credit facility, and placed all of its ratings on CreditWatch with negative implications.

The CreditWatch placement reflects the risk of the company's credit quality quickly deteriorating in the case of further installation delays or an inability to bridge liquidity for the period needed to resolve the operational issues.

S&P said it expects to resolve the CreditWatch when it has more clarity on the company's plan to address its operational and financial issues and on the outcome of the restructuring opinion, which should materialize during the second quarter of 2019.

Senvion is commissioning a restructuring opinion and started talks with lenders and main shareholders to secure financing, the agency explained.

Given that Senvion has utilized its revolving credit facility, S&P said it considers that its limited financial flexibility and liquidity put it at risk of a covenant breach in 2019 under its super senior secured facility.

The company's operating performance also continues to lag behind expectations with its debt-to-EBITDA ratio expected to be higher than 10x in 2018 due to project delays, recovering to 7x to 8x in 2019 from a pickup in installations, the agency said.

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