S&P trims Sabre Industries

S&P said it trimmed its ratings for Sabre Industries Inc. and its first-lien credit facility to B- from B, citing high inflation eating into the firm’s EBITDA margins. The facility includes a $125 million revolver due 2026 and an $875 million term loan due 2028. The 3 recovery ratings for the loans are unchanged.

“Yearlong significant inflation–particularly in steel–has curtailed Sabre's EBITDA margins over the last three quarters. For over 12 months, commodity prices increased more than 300%. While Sabre can pass through price increases to customers, it is typically with a lag. Thus, the prolonged and unyielding nature of the commodity inflation exacerbated the effects of such a lag,” the agency said in a press release.

S&P noted Sabre’s leverage as of Jan. 31 was 11.8x compared to 2.6x as of the fiscal year ended April 30, 2021 and 8x as of the quarter ended July 31.

The outlook is stable.

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