S&P ups Avantor

S&P said it hiked Avantor Inc.’s secured debt to BBB- from BB+ and its unsecured debt to BB from BB-. Concurrently, the agency raised the secured debt’s recovery rating to 2 from 3, indicating substantial recovery (50%-70%; rounded estimate: 75%) in default and the unsecured debt’s recovery rating to BB from BB- and the recovery rating to 5 from 6, indicating substantial recovery (10%-30%; rounded estimate: 10%) in default. S&P also revised the outlook to stable from negative and affirmed the BB+ issuer rating.

The agency said it raised the ratings to reflect Avantor repaying secured and unsecured debt.

“Avantor improved its S&P Global Ratings-adjusted leverage to 3.7x at the end of 2022, from 4.8x the prior year-end (4.2x pro forma for the Ritter and MasterFlex acquisitions), largely through a combination of EBITDA growth, low acquisition activity throughout the period, and debt repayment. We believe, absent acquisition activity, the company will continue to repay debt and expect leverage between 3.25x-3.75x by the end of 2023,” S&P said in a press release.

The outlook is stable.

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