S&P alters Advancion view to negative

S&P said it changed its outlook for Advancion Holdings LLC (Advancion Corp.) to negative from stable.

“The outlook revision follows declining demand and weakened operating results through the first half of 2023 and our expectation for elevated debt leverage in 2023. Macroeconomic uncertainty, sluggish demand and customer destocking continue to affect the company. We now anticipate leverage will remain elevated for the rating over the next year. Specifically, we project S&P Global Ratings-adjusted debt to EBITDA of about 9x-10x over the next 12 months. More specifically, for the last 12-month (LTM) period ended March 2023 and June 2023, S&P Global Ratings adjusted debt to EBITDA exceeded 10x,” the agency said in a press release.

S&P also affirmed the B- issue-level and 3 recovery ratings (rounded estimate: 50%) on the company's first-lien secured debt and the CCC issue-level and 6 recovery ratings (rounded estimate: 0%) on its second-lien secured debt.

Additionally, the agency affirmed the CCC issue-level rating and 6 (rounded estimate: 0%) recovery rating on Advancion Sciences, Inc. (formerly Kobe US Midco 2 Inc.) deeply subordinated debt (TopCo payment-in-kind toggle notes).

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