S&P trims Mativ

S&P said it lowered its ratings on Mativ Holdings Inc. and its senior secured term loan to B from B+ and its senior unsecured notes to B- from B.

The agency said it expects Mativ’s adjusted debt to EBITDA will continue above 6x for the next 12-24 months.

“While this level of leverage is elevated relative to that of peers, we believe the company will continue to decrease leverage and that it will maintain EBITDA to interest coverage above 1.5x,” S&P said in a press release.

The agency warned “Mativ's thinning covenant headroom is a risk factor. The company's net leverage covenant steps down one turn when tested March 31, 2024. As such, effective availability under its revolving credit facility will decrease significantly from Dec. 31, 2023. Still, we expect the company will maintain sufficient liquidity across the coming 12 months to satisfy operating needs including intra-period working capital investments, debt amortization, capital expenses, and shareholder distributions.”

The outlook is negative.

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