Fitch puts Hillman on positive watch

Fitch Ratings said it placed the CCC+ issuer default rating of the Hillman Cos., Inc. and the Hillman Group, Inc. on rating watch positive. Fitch also placed the first-lien secured term loan and senior unsecured bonds on rating watch positive.

These actions follow the announcement its current private equity sponsor, CCMP, plans to divest a majority of its ownership position to a publicly held special purpose acquisition company, the agency said.

The action reflects the expectation the transaction will result in meaningful deleveraging, bolster FCF and improve Hillman Group’s financial flexibility. “Fitch will resolve the rating watch when the transaction closes, at which time the IDR could be upgraded several notches,” the agency said.

If the deal closes as expected, Fitch said it forecasts leverage falling to the 3x range in 2021 from 6.8x expected at fiscal year-end 2020.

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