S&P places Glatfelter on positive watch

S&P said it placed its ratings for Glatfelter Corp., including its CCC senior unsecured ratings, on CreditWatch with positive implications.

The positive watch follows Wednesday’s announcement that Berry Global Group Inc. will spin off and merge its health, hygiene, and specialties nonwovens and films business with Glatfelter, the agency said.

“We view the merger as credit positive because we believe Glatfelter should benefit from lower debt leverage and increased scale and capacity after the transaction closes. We believe the merger will likely increase Glatfelter's scale and the scope of its operations and strengthen its geographic diversity. Similarly, we expect the combined company to generate approximately $3.6 billion in annual revenue and earnings sufficient to improve its S&P Global Ratings-adjusted debt leverage materially from current elevated levels,” S&P said in a press release.

The company's S&P Global Ratings-adjusted debt leverage on a trailing-12-month basis was 9.5x at the end of its September 2023 quarter.

S&P said it plans to resolve the positive watch upon review of the new final capital structure, new ownership structure, financial policies, debt leverage and its assessment of the combined businesses.

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