S&P revises API view to negative

S&P said it revised API Holdings III Corp.’s outlook to negative from stable but affirmed the B- ratings on it and API’s first-lien debt. The 3 recovery rating is unchanged.

“The Covid-19 pandemic frustrated API's new management team's efforts to improve operating efficiency. API replaced its CEO and CFO in September 2019 and February 2020, respectively, and we think this change will likely result in a focus on improving operations. However, delayed orders and supplier disruptions resulted in margins not improving as we expected, although the company successfully improved working capital management,” the agency said in a press release.

With revenues down in Canada and Europe but slightly up in the U.S., S&P said it expects debt to EBITDA was 9.2x-9.6x in 2020 – “much higher than our forecast of 7.5x-8x,” the agency said.

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