S&P downgrades 3M

S&P said it lowered 3M Co.’s issuer and senior unsecured note ratings to A from A+. The ratings remain on CreditWatch with negative implications.

“3M Co. reported weaker results than we anticipated, with 2022 sales declining by 3.2% and S&P Global Ratings-adjusted EBITDA margins declining significantly. As a result, S&P Global Ratings-adjusted debt to EBITDA increased to 2x, our threshold for a lower rating,” S&P said in a press release.

Additionally, the agency noted 3M faces substantial litigation with regard to its combat arms earplugs and PFAS. “While PFAS could ultimately be a more significant liability, in our view, we believe litigation regarding its Combat Arms Earplugs is a more significant risk in the short term. As of Dec. 31, 2022, 3M was a defendant in lawsuits representing about 141,000 individual claimants and an additional 90,700 unfiled and unverified claims alleging product liability and fraudulent misrepresentation and concealment.”

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