S&P lowers Alion, facilities

S&P said it lowered its corporate credit rating on Alion Science and Technology Corp. to B- from B.

The agency also lowered the ratings on the company’s $40 million first-lien revolving credit facility due in 2020 to B+ from BB- and the $300 million first-lien term loan due in 2021 to B- from B.

The 1 recovery rating on the revolving credit facility indicates that creditors can expect very high (90%-100%; rounded estimate: 95%) recovery in the event of a payment default, while the 3 recovery rating on the term loan indicates creditors can expect meaningful (50%-70%; rounded estimate: 50%) recovery.

The outlook is stable.

S&P said it rates the first-lien team loan lower than the first-lien revolver because of the priority of repayment on the revolver above the term loan.

“Lowering the corporate credit rating on Alion is based on weaker revenues and earnings that will likely result in debt to EBITDA above 7.5x in 2017 compared to our earlier expectation of 6.5x-7x,” the agency said in a news release.

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