S&P cuts Speedcast

S&P said it lowered its issuer credit rating and associated issue ratings on Speedcast International Ltd. to CCC from B-. The recovery rating on the company’s senior secured debt remains at 4 (45%), indicating average recovery prospects upon payment default.

“We lowered the ratings to reflect our view that persisting weak operating performance has heightened the risk of covenant breach or payment default during the next 12 months. We believe that Speedcast’s aggressive growth strategy, cost cutting and failure to effectively integrate prior acquisitions have eroded the quality of its earnings and cash generation. This, together with an increasingly competitive operating environment, has pressured the group’s operating margins and access to liquidity,” said S&P in a press release.

The outlook is negative.

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