S&P turns Knowlton view to stable

S&P said it changed its outlook for Knowlton Development Corp. Inc. to stable from negative and affirmed the B- issuer and senior secured term loan ratings. The 3 recovery rating on the debt is unchanged, indicating meaningful (50%-70%; rounded estimate: 50%) recovery at default.

“The stable outlook reflects our view that KDC will sustain a debt-to-EBITDA ratio of 7x through fiscal 2023 ending April 2023. The outlook revision reflects our view of KDC's ability to sustain profitability amid a volatile cost environment. Although demand for KDC's products has remained steady, the company has faced significant cost headwinds, specifically raw materials and freight. In response to an elevated cost environment, KDC implemented price increases through its pass-through mechanisms. The favorable effects of price increases are now beginning to be reflected in the company's quarterly results,” S&P said in a press release.

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