S&P flips Glatfelter outlook to positive

S&P said it changed its outlook on Glatfelter Corp. to positive from negative.

“Glatfelter's debt maturity profile is improved after refinancing though interest costs will increase materially and leave modest free cash flow for debt repayment. The company was able to refinance its term loan due February 2024 in the first quarter of this year with a new €250 million term loan,” the agency said in a statement.

S&P noted its current projection for Glatfelter is “flat to slightly positive free cash flow for full-year 2023, an improvement over the negative $79 million at the end of 2022.”

The positive outlook indicates an upgrade is possible within the next year if Glatfelter can boost its free cash flow and lower its debt leverage. S&P said it forecasts the company’s 2023 leverage will be above 8x.

The agency also affirmed Glatfelter’s CCC+ issuer rating and the CCC rating on its $500 million of notes due 2029. The recovery rating on the notes remains 5.

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