S&P shifts BBB Industries view to stable

S&P said it changed the outlook for GC EOS Buyer Inc. (BBB Industries) to stable from negative and affirmed its CCC+ issuer rating.

“The outlook revision and ratings affirmation reflect BBB Industries' improved liquidity position and higher cash flow. Liquidity increased initially when the company issued $240 million senior secured notes and used part of that to pay down its revolver balance,” S&P said in a press release.

The company boosted its cash position to $82.3 million at the end of the third quarter from $7.9 million at the end of 2019, mostly by lowering cutting capital, particularly inventories. “While we expect part of these working capital gains to reverse in 2021 as volumes recover, BBB Industries is in a substantially better liquidity position to absorb small uses of cash in the next 12 months,” the agency said.

The outlook reflects the expectation BBB Industries will maintain adequate liquidity with no near-term debt maturities, even if FOCF reverts to slightly negative in 2021, the agency said.

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