S&P cuts Hunter Douglas Finance

S&P said it downgraded its ratings for Hunter Douglas Finance BV and its first-lien debt to B from B+. The 3 recovery rating remains unchanged and indicates an expectation of meaningful (50-70%; rounded estimate: 55%) recovery in default.

“The company's profitability through the first nine months of fiscal 2022 deteriorated from a mix of inflationary pressures and unfavorable impacts in foreign exchange rates, with S&P Global Ratings-adjusted EBITDA margin falling below our original expectations of approximately 18%. To manage cost inflation, the company began implementing price increases during the year, which we expect will continue into 2023,” the agency said in a statement.

S&P said it now forecasts the issuer’s leverage will hover at about 6x in 2022 compared with its original estimate of the mid-5x area, increasing to the mid-6x area in 2023.

The outlook is stable.

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