Veregy Intermediate Inc., a Phoenix, Ariz.-based provider of energy efficiency services, has underperformed our expectations with EBITDA declines due to project delays stemming from supply chain constraints as well as inflationary pressures on materials, equipment, and labor. We now forecast the company will generate negligible free operating cash flow (FOCF) in 2022 and 2023 with the risk that liquidity could significantly tighten if supply chain-driven project delays do not ease in 2023. Therefore, we revised our outlook on Veregy to negative from stable and affirmed all ratings including the 'B-' issuer credit rating. The negative outlook reflects that we could lower our ratings over the next 12 months if EBITDA deteriorates further, tightening liquidity, or we view the capital structure
