S&P rates Hayward B+

S&P said it assigned a B+ rating to Hayward Holdings, Inc., the parent of Hayward Industries Inc., and upgraded its senior secured first-lien term loan to B+ from B with an unchanged recovery rating of 3. The 3 rating indicates expectations for meaningful recovery in default. The estimated recovery of 65% reflects reduced first-lien term debt.

The agency also upgraded Hayward Industries’ rating to B+ from B and removed all its ratings from CreditWatch with positive implications, where they were placed on Feb. 22.

The rating actions follow Hayward Holdings’ initial public offering that raised $377 million of proceeds.

“The upgrade reflects an improved financial risk profile following the IPO, but Hayward continues to be financial sponsor-controlled. We estimate the debt repayment from IPO proceeds totaling about $369 million results in pro forma fiscal year-end 2020 debt to EBITDA of about 5x (below 5x assuming last year's restructuring charges do not repeat). In addition, we expect low-double-digit percentage sales growth and EBITDA margins approaching 25% to lead to debt to EBITDA below 4x over the next year,” the agency said in a press release.

The outlook is stable.

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