Fitch rates Hexcel BBB-

Fitch Ratings said it assigned BBB- ratings to Hexcel Corp., its senior unsecured revolving credit facility and senior unsecured bonds long-term ratings. The outlook is stable.

“Hexcel's ratings are supported by its leading and defensible market position, the strategic importance of its product in current and future aircraft innovation, and its positive, through-the-cycle FCF and mid-high teen EBITDA margins, which Fitch considers to be strong for BBB- rated aerospace & defense (A&D) issuers. We expect margins to continue to benefit from operational optimization as end markets continue to recover,” the agency said in a press release.

However, Fitch noted Hexcel’s exposure to cyclical end-markets and customers' supply chain challenges, as well as some concentration by product type. “Fitch considers the company's performance to be moderately linked to major programs within commercial aerospace, which could exhibit volatility based on OEM production and delivery rates.”

With the expectation that Hexcel’s leverage will decline to 2x by 2024, the agency said Hexcel’s leverage metrics are in line with a BBB- rating.

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