S&P shifts Array view to stable

S&P said it revised Array Technologies Inc.’s outlook to stable from positive and affirmed its B+ ratings on the firm and its senior secured term loan.

“We see the company's issuance of $350 million of perpetual preferred stock as a $148 million net increase to Array's debt balance, as the company intends to use some of the proceeds to reduce revolver borrowings by $102 million and the term loan balance by $100 million. The preferred shares are held by one entity and Array has the option to redeem them (potentially via debt proceeds, in our view) at its discretion,” S&P said in a press release.

Array's adjusted debt-to-EBITDA ratio will climb to more than 7x at the end of 2021. Array should start to recognize higher-margin work in the latter part of next year, and then its leverage ratio should shrink to 4.4x at the end of 2022, the agency said.

“This is within the 4x-5x range we see as appropriate for the current ratings,” S&P said.

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