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S&P lowers H.B. Fuller
S&P said it lowered the corporate credit rating on H.B. Fuller Co. to BB+ from BBB- and removed the rating from CreditWatch, where it was placed with negative implications Sept. 5.
The outlook is negative.
The agency also said it lowered the senior unsecured debt rating to BB from BBB- and removed the rating from CreditWatch.
S&P also said it assigned a 5 recovery rating to this debt, indicating 10% to 30% expected default recovery.
The agency also said it converted the $400 million revolver to senior secured debt from unsecured debt.
S&P also said it lowered the rating on this debt to BB+ from BBB- and removed the rating from CreditWatch with negative implications.
The agency also said it assigned a 3 recovery rating to this debt, indicating 50% to 70% expected default recovery.
S&P also said it assigned a BB+ rating to the proposed senior secured debt.
The recovery rating is 3, indicating 50% to 70% expected default recovery.
S&P also assigned a BB rating to the proposed senior unsecured debt. The recovery rating is 5, indicating 10% to 30% expected default recovery.
The agency also said it will withdraw the ratings on the $300 million senior unsecured revolver and term loan due 2019, as they have been repaid.
S&P also said it will look to withdraw all ratings on Royal Holdings once the transaction closes and all of its debt has been repaid.
The downgrades reflect the transformational nature of the debt-funded Royal acquisition, which has led to credit measures no longer viewed appropriate for an investment-grade rating, the agency explained.
S&P also said it expects the acquisition of Royal to close in the fourth quarter of 2017.
The negative outlook reflects a view that credit measures pro forma for the acquisition have little cushion at the current rating, the agency said.
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