S&P assigns Aecom notes BB

S&P said it assigned its BB issue-level rating and 4 recovery rating to Aecom Technology Corp.'s proposed $750 million unsecured notes due 2027. The 4 recovery rating indicates an expectation for average (30%-50%; upper half of the range) recovery in a payment default scenario.

The proposed notes rank pari-passu with Aecom's existing unsecured notes.

At the same time, the agency affirmed its BB issue-level ratings on Aecom's existing $800 million unsecured notes due 2022 and $800 million unsecured notes due 2024. The 4 recovery ratings are unchanged. It also affirmed the BBB- issue-level rating on its senior secured credit facility. The 1 recovery rating is unchanged.

Finally, the agency affirmed its BB- issue-level rating on the company's senior unsecured debt issued by URS Corp. The 5 recovery rating is unchanged.

The company anticipates that it will use the proceeds from the new $750 million unsecured notes to fully repay its term loan B due 2021, pay down its revolving credit facility borrowings and repay a portion of its term loan A due 2021.

The agency plans to withdraw its ratings on the term loan B when the transaction is finalized.

S&P said the refinancing transaction will not significantly alter the company's credit metrics, therefore our corporate credit rating on Aecom remains unchanged.

The ratings reflect the company’s participation in the volatile and competitive engineering and construction industry.

S&P said it expects that Aecom will maintain debt leverage of less than 5 times.

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