Fitch downgrades Sequa

Fitch Ratings said it downgraded Sequa Corp.'s long-term issuer default rating to CCC+ from B-.

Fitch also downgraded the company's first-lien term loan and revolver to B-/RR3 from B/RR3 and second-lien term loan to CCC-/RR6 from CCC/RR6.

The outlook is negative.

The agency said the downgrade is driven by Fitch's expectation that demand for Chromalloy products will remain weak into at least mid-2021 due to the coronavirus pandemic.

It also considers the company's approaching term loan maturity and highly levered capital structure, limited financial flexibility, volatile cash flows, moderate execution risk, high degree of competition at the Chromalloy segment, and the cyclicality of both the aerospace and construction industries, which contributes to Sequa's sensitivity to economic downturns, Fitch added.

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