S&P lifts Armstrong World

S&P said it raised the issuer credit rating on Armstrong World Industries Inc. to BB+ from BB, along with the ratings on the company's secured bank credit facilities to BBB- from BB+.

The 2 recovery rating is unchanged.

The upgrades reflect an expectation that the company will maintain an improved debt-to-EBITDA ratio of about 2x or lower for 2019, a strong level for the rating, S&P said.

The upgrades also consider an expectation that Armstrong will continue improving profitability as it grows its high-margin architectural specialties business with further penetration in the ceiling and wall markets, the agency said.

S&P also said it expects the company will maintain a prudent financial policy and utilize free cash flow to fund internal operational investments, pursue acquisitions and fund returns to shareholders.

The stable outlook reflects an expectation that the company will maintain a debt-to-EBITDA ratio of about 2x over the next 12 months, S&P said.

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