S&P cuts KAMC

S&P said it lowered its ratings for KAMC Holdings Inc. (Franklin Energy) to CCC+ from B-, its first-lien debt to CCC+ from B- and its second-lien debt to CCC- from CCC.

“The downgrade reflects Franklin's continued underperformance leading to negative cash flow generation, tight liquidity, and elevated leverage , factors we expect to persist into 2023. The company's profitability has weakened in recent quarters resulting in a smaller EBITDA base and reduced S&P Global Ratings-adjusted EBITDA margins. Franklin Energy's earnings have been under pressure since the onset of the Covid-19 pandemic, which impaired the company's ability to run its field service operations,” the agency said in a press release.

S&P noted Franklin’s balance sheet has about $450 million in debt as of the end of the first quarter and adjusted leverage above 10x.

The outlook is negative.

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