S&P cuts Congruex Group

S&P said it downgraded its ratings on Congruex Group LLC and its first-lien term loan and revolving credit facility to B- from B. The 3 recovery rating is unchanged (rounded estimate: 50%).

“The downgrade reflects Congruex's lower earnings resulting in deteriorated leverage and cash flow metrics in 2023 and our expectation that performance will remain sluggish in 2024. Congruex experienced a decline in operating performance in 2023 as a result of reduced demand primarily in the company's wireless end markets. Many of the large telecom companies pulled back on capital expenditures in 2023, reducing demand for Congruex's services throughout the year,” S&P said in a press release.

The agency said it is forecasting Congruex to end 2023 with an EBITDA about 50% lower than prior expectations. “For the full year 2023, we expect S&P Global Ratings-adjusted EBTIDA margins to be at about 11% resulting in S&P Global Ratings-adjusted debt-to-EBITDA in the low- to mid-6x range, a significant increase from 2022 where it was in the mid-5x range.”

The outlook is stable.

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