S&P snips SI Group

S&P said it lowered its ratings for SI Group (SK Mohawk Holdings Sarl) and its senior secured credit facilities to CCC from CCC+ and its unsecured notes to CCC- from CCC. The 3 and 5 recovery ratings are unchanged.

“Following weaker-than-expected first-half 2023 earnings, we expect slow demand and pricing will continue to pressure earnings, profitability, and cash flow. As an unfavorable operating environment continues in the industry and economy, this performance was largely because of weak volumes. Renewed market softness and customer destocking, especially in the industrials solutions segment, came after a brief bounce back in the preceding quarter. As a result, volumes declined about 17% year over year during the first half,” the agency said in a statement.

S&P said it now forecasts S&P Global Ratings-adjusted debt to EBITDA to remain above 10x and EBITDA interest coverage to stay about 1x in 2023 and 2024.

The outlook is negative.

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