S&P rates Aecom loan BBB-

S&P said it assigned its BBB- issue-level rating and 1 recovery rating to Aecom’s $248.5 million senior secured delayed-draw term loan due in 2023. The 1 recovery rating indicates S&P’s expectation lenders would receive very high (90%-100%; rounded estimate: 95%) recovery of their principal in the event of a default.

Proceeds will be used to repay all of the company’s 5% senior notes due in 2022, which the Aecom assumed in its acquisition of URS Corp. in 2014.

At the same time, S&P upped the ratings on Aecom’s unsecured notes due in 2022 and 2024 to BB fromBB- and removing them from CreditWatch, where the agency placed them with positive implications on Feb. 19. The 4 recovery rating on the notes indicates S&P’s expectation lenders would receive average (30%-50%; rounded estimate: 35%) recovery of principal in the event of a default. “Overall, the improved recovery prospects are in part due to the reduced secured debt in the capital structure,” S&P said in a press release.

S&P also affirmed the BBB- issue-level rating on Aecom’s revolving credit facility with a 1 recovery rating.

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