Fitch revises Polygon trend to negative

Fitch Ratings said it revised the outlook on Polygon Group AB to negative from stable and affirmed the long-term issuer default rating at B. The agency also affirmed company's €430 million first-lien term loan, the €55 million delayed draw first-lien term loan B2 and its €90 million revolving credit facility ratings at B with recovery ratings of RR4.

“The negative outlook mainly reflects profitability pressures due to ongoing supply-side challenges. We anticipate that leverage metrics will remain outside of our negative sensitivities through the end of 2023. The subsequent recovery in 2024 will depend on normalizing the supply-side environment and the successful integration of recent acquisitions. The downside risk is further exacerbated by the expected increasing cost of the company's floating-rate debt, resulting in weakening coverage metrics and reduced free cash flow (FCF) generation,” Fitch said in a press release.

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