Moody's downgrades Mativ

Moody's Ratings said it downgraded Mativ Holdings, Inc.'s corporate family rating to B1 from Ba3 and probability of default rating to B1-PD from Ba3-PD. Concurrently, Moody's trimmed the rating on Mativ's backed senior secured bank credit facility, consisting of the company's term loans and revolving credit facility, to Ba3 from Ba2 and on the senior unsecured notes to B3 from B2. The SGL-3 speculative grade liquidity rating remains unchanged.

Mativ underperformed relative to the agency’s forecast as weaker demand constrained margins and maintained Mativ's high leverage, with Moody's adjusted debt-to-EBITDA near 6x (including accounts receivable securitization debt), despite substantial debt reduction from recent asset sales, the agency said.

“Additionally, Moody's expects that macroeconomic pressures will weigh on near-term earnings and cash flow and on the timing to derive benefits from Mativ's M&A in recent years, which have been slow to materialize. Therefore, any significant improvement in operating performance is unlikely to materialize for some time,” the agency said in a statement.

The outlook remains stable.

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