Moody's upgrades Armstrong World

Moody's Investors Service said it upgraded Armstrong World Industries, Inc.'s corporate family rating to Ba3 from B1 and probability of default rating to Ba3-PD from B1-PD.

Moody's also said it expects financial performance and resulting key debt credit metrics to improve over the next 12- to 18-months, warranting higher ratings.

The agency also said it upgraded the company's senior secured bank credit facility to Ba3 (LGD 3) from B1 (LGD 3), and affirmed its SGL-1 speculative grade liquidity rating.

The outlook is stable.

The upgrades result from expectations of better debt credit metrics due to a combination of growing revenues, strong operating margins and conservative financial policies, Moody's said.

The agency said it forecasts debt-to-EBITDA declining to about 2.4x by mid-2020, from 2.7x as of Sept. 30, 2018.

The fundamentals for private non-residential construction remain sound and support growth, Moody's added, but risks remain due to the cyclical nature of the industry.

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