Moody’s ups FGI Acquisition

Moody's Ratings said it upgraded FGI Acquisition Corp.'s (Flexitallic) corporate family rating to B3 from Caa1 and probability of default rating to B3-PD from Caa2-PD.

Concurrently, Moody's upgraded Flexitallic's senior secured bank credit facilities to B3 from Caa1. The outlook is stable.

“The ratings upgrades reflect solid demand for Flexitallic’s sealing solutions, particularly in the downstream oil and gas and industrial end markets. Continued revenue growth will drive incremental improvement in earnings such that adjusted debt/EBITDA will decline by roughly one turn to about 4.5 times over the next 12-18 months,” Moody’s said in a news release.

“Despite the expiration of an interest rate hedge, Moody's expects that earnings growth will enable Flexitallic to maintain interest coverage as measured by EBITA/Interest at above 1.0 times. Liquidity will remain adequate and be supported by positive free cash flow generation and sufficient cash on hand to partially mitigate weak revolver availability.”

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