S&P gives B ratings to Titan, loan

S&P said it assigned B ratings to Titan (LSF11 Trinity Bidco Inc.) and its planned $675 million term loan. The recovery rating on the loan is 3. Titan is buying MHI Holdings LLC for Lone Star Funds.

Titan will use the loan and equity to fund the purchase. The company will also have an unrated revolver of $100 million to $125 million, expected to be undrawn at close.

“We don't expect Titan's business to change because of the acquisition. Titan will continue to provide ship repair and fabrication services to U.S. government and commercial customers, primarily in the Pacific Northwest, Alaska, San Diego, and Norfolk, Va. Revenue for both ship repair and fabrication declined in 2022 due to the timing of some Navy modernization projects and the company being more selective with fabrication opportunities. Repair schedules suggest ship repair revenue will return to growth in coming years, while fabrication volumes increase due to work on various missile defense programs and infrastructure opportunities,” S&P said in a press release.

The outlook is stable. The agency said it sees Titan’s debt to EBITDA hovering near 5x throughout the forecast.

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