S&P assigns CCC+ to CWT Group

S&P said it a CCC+ issuer rating to CWT Group LLC, formerly CWT Travel Group Inc., and a CCC issue-level and 5 recovery rating to its $100 million senior secured second-lien term loan. The outlook is negative. S&P withdrew its ratings for CWT Travel.

CWT Group completed its reorganization which chopped its debt by more than $500 million.

The new capital structure includes a $200 million super-priority first-lien facility due in 2026 ($110 million currently drawn revolver, not rated, and $90 million term loan), and a new $100 million senior secured second-lien term loan due in 2029, the agency said.

“Our CCC+ issuer credit rating with a negative outlook on CWT reflects our expectation that the company may not generate cash flow sufficient to sustain its capital structure. We believe increased levels of competition, flattening business travel activity, and macroeconomic uncertainty will continue to pressure operating performance over the next 12 months. To offset depressed demand for business travel, the company has been reducing its expenses in the form of headcount reductions to return to positive EBITDA levels.

“However, we also expect CWT will continue to incur material restructuring charges within the next 12 months to further reduce its staff and invest in technology, among other costs, which will partially offset the benefits of the cost savings,” S&P said in a press release.

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