S&P changes Armstrong World view

S&P said it affirmed the BB corporate credit rating on Armstrong World Industries Inc. and revised the outlook to positive from stable.

At the same time, the agency affirmed the BB+ issue-level ratings on the company's senior secured debt, including its $200 million revolving credit facility, $600 million term loan A and $250 million term loan B.

The recovery rating is 2, indicating an expectation for substantial (70%-90%; rounded estimate: 70%) recovery in the event of a payment default.

S&P said the revision of the outlook reflects the company's improved margins since the spin-off of its flooring division and prospects for improved debt-to-EBITDA leverage in 2018.

“The sale of Armstrong's low-margin European and Pacific Rim business units will further enhance Armstrong's overall operating margins,” the agency said in a news release.

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