S&P trims Element Materials

S&P said it downgraded the issuer ratings for Element Materials Technology Ltd. and its subsidiaries Greenrock Finance Inc. and Greenrock Midco Ltd. to B- from B. The agency also lowered the issue rating on the first-lien facilities to B- from B. The 3 recovery rating (rounded recovery: 50%) is unchanged.

“Despite improving year-to-date revenue and EBITDA growth relative to 2020, a year marked by Covid-19, U.K.-based Element Materials Technology Ltd.'s (Element) capital structure, already highly leveraged, was further stretched when the company took on more debt. In our view, this suggests a more-aggressive financial policy and renewed appetite for prioritizing debt-funded acquisitions over stronger credit metrics,’ S&P said in a press release.

The agency noted Element added $180 million in first-lien debt in July to its debt stock, under existing debt baskets. It used the money to refinance the capital expenditure facility it uses for acquisitions.

The outlook is stable.

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