Moody’s changes Armstrong World to stable

Moody's Investors Service said it changed Armstrong World Industries, Inc.'s outlook to stable from positive following the company's recent announcement that it is selling its EMEA and Pacific Rim businesses and operations to Knauf International GmbH for net cash of about $250 million.

“Most cash proceeds will be returned to shareholders, rather than repaying debt. Larger payments to shareholders reflects a more aggressive financial strategy than Moody's previous expectations,” the agency said in a news release.

Additionally, by selling its operations outside North America the company is further reducing its scale and geographic diversification.”

In related rating actions, Moody's said it affirmed Armstrong's B1 corporate family rating, B1-PD probability of default rating and the B1 ratings assigned to its bank credit facilities. The speculative grade liquidity rating was also affirmed at SGL-1.

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