APTIM bonds have traded off over the past week in the wake of the industrial services provider recently disclosing a year-over-year earnings decline for 2Q19, according to two sources familiar with the matter.

The company posted a 68% EBITDA drop for 2Q19, down to USD 1.7m from USD 5.4m in 2Q18, the sources continued. Including addbacks, adjusted EBITDA came in at USD 9.8m for the quarter, down 50% YoY from USD 19.7m.

APTIM in the quarter generated USD 347m of revenue, down roughly 14.5% from USD 406m in 2Q18, the sources added.

The company’s USD 515m 7.75% secured notes due 2025 dipped as low as 69.25 to yield 16.071% on Friday (16 August) from trades at 70–70.25 earlier in the week, according to MarketAxess.

As of 30 June, liquidity totaled USD 133m through USD 90m in cash and USD 43m of ABL availability. The company is roughly 10x-levered based on USD 515m of total debt and USD 50.8m of LTM EBITDA.

APTIM was created as a standalone company in mid-2017 when Veritas acquired Chicago Bridge & Iron’s Capital Services business, as CB&I sold assets to deal with near-term maturities and covenant compliance.

Veritas bought the business for USD 755m, financing the sale with the 2025 notes. APTIM began struggling with contract losses shortly after the buyout financing.

APTIM did not respond to a request for comment. A representative from Veritas declined to comment.

2019 Debtwire