Fitch eyes Sequa positively

Fitch Ratings said it placed Sequa Corp.'s CCC+ issuer default rating and its long-term issue ratings on rating watch positive. This action follows the announcement that Sequa plans to sell its precoat metals business to AZZ Inc. for $1.28 billion, or around $1.13 billion of net proceeds.

“The placement on positive watch reflects uncertainty regarding Sequa's long-term capital structure and strategy following the divestiture. Fitch expects that the company will use nearly all of the proceeds from the transaction to reduce its debt balance and improve its financial profile to a level more commensurate with the B rating category, which would lead to an upgrade of the company's ratings to at least B-. Sequa’s weak credit metrics, limited financial flexibility and vulnerable FCF have been the main factors driving the CCC+ rating in recent years,” the agency said in a press release.

The sale is expected to close by the end of May, at which point Fitch said it aims to resolve the rating watch.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.