S&P trims Husky Injection

S&P said it lowered the rating for Husky Injection Molding Systems Ltd. to B- from B and lowered its issue-level ratings on Husky’s secured term loans and unsecured notes by one notch to B- and CCC, respectively. The recovery ratings on the loan and notes are unchanged.

The downgrade primarily reflects S&P’s view that Husky’s group credit profile is weaker following the company’s plan to issue $450 million of unsecured PIK toggle notes at Husky III Holding Ltd. and use the proceeds to fund a shareholder distribution.

“We expect the proposed notes to add about 1.5x of debt leverage and contribute to consolidated adjusted debt-to-EBITDA of 8.5x-9x by the end of 2020, demonstrating a financial policy that is more aggressive than we had previously expected,” said S&P in a press release.

The outlook is stable.

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