Fitch rates Griffon notes B+

Fitch Ratings said it assigned a rating of B+/RR4 to Griffon Corp.'s planned offering of up to $800 million of senior unsecured notes, the proceeds of which will be used to repay a like amount of the company's senior unsecured notes. Fitch rates Griffon's long-term issuer default rating B+. The outlook is stable.

Financial leverage improved in fiscal 2019 (ended September), with debt/EBITDA ending the fiscal year at 5.3x compared with 6.7x at the end of fiscal 2018. This improvement was driven by higher earnings from healthy organic revenue growth and the impact of recent acquisitions. Fitch said it expects debt/EBITDA to gradually improve over the next several years to the mid-4x by the end of fiscal 2022 driven by EBITDA margin growth and modest debt repayment from free cash flow.

As of Jan. 30, Griffon upsized its revolver to $400 million from $350 million and extended its maturity to March 22, 2025. Griffon's maturity schedule consists of $1 billion of senior unsecured notes that mature in March 2022 and the revolver maturing in March 2025. The maturity of the revolver moves to Dec. 1, 2021 if the senior notes have not been fully repaid before that date with new debt maturing on or after June 23, 2025.

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