Moody’s downgrades Salient

Moody’s Investors Service said it downgraded its ratings for Salient CRGT, Inc., including the company’s corporate family rating to Caa1 from B3 and probability of default rating to Caa1-PD from B3-PD, as well as the ratings for its first-lien credit facility to B3 from B2.

“Salient CRGT’s recent contract awards have been favorable but the Covid-19 pandemic will likely delay the associated revenue ramp-up and the company’s high leverage with more demanding covenant tests and loan amortization scheduled for Q2-2020 gives tight maneuvering room for even light working capital growth or unexpected costs,” said Bruce Herskovics, Moody’s lead analyst for Salient, in a press release.

“We do, however, recognize that with recent contract awards the company still has a chance of bringing leverage closer to the mid-6x before the revolver expires in 2021,” he added.

The outlook is negative.

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