Research Update: LaserShip Inc. Outlook Revised To Negative On Weaker Credit Metrics, Execution Risk; Ratings Affirmed

Parcel delivery company LaserShip Inc. experienced an operational disruption in late 2021 that contributed to lower-than-expected volumes and consequently weaker-than-expected credit metrics through the first quarter of 2022. Although volumes have since recovered, we now expect significantly higher capital expenditures related to capacity expansion will result in negative free operating cash flow (FOCF) in 2022. Therefore, we revised our outlook to negative from stable and affirmed all ratings on LaserShip, including our 'B-' issuer credit rating. There is no change to our '3' recovery rating on the company's first-lien debt or the '6' recovery rating on the second-lien debt. However, we revised our rounded estimate on the first-lien debt to 50% from 60% due to additional debt associated with the

...- Parcel delivery company LaserShip Inc. experienced an operational disruption in late 2021 that contributed to lower-than-expected volumes and consequently weaker-than-expected credit metrics through the first quarter of 2022. - Although volumes have since recovered, we now expect significantly higher capital expenditures related to capacity expansion will result in negative free operating cash flow (FOCF) in 2022. - Therefore, we revised our outlook to negative from stable and affirmed all ratings on LaserShip, including our 'B-' issuer credit rating. - There is no change to our '3' recovery rating on the company's first-lien debt or the '6' recovery rating on the second-lien debt. However, we revised our rounded estimate on the first-lien debt to 50% from 60% due to additional debt associated with the company's new receivables securitization facility. - The negative outlook reflects our expectation that we could lower our rating if the company experiences additional operational disruptions...

Research Update