S&P upgrades Interface

Standard & Poor’s said it raised the corporate credit rating on Interface Inc. to BB+ from BB.

The agency also said it raised the ratings on the senior notes one notch to BB+ from BB. The recovery rating is unchanged at 3, indicating 50% to 70% expected default recovery.

The outlook is stable.

The company recently announced its intention to redeem its senior notes before year-end, S&P said.

The upgrade reflects an expectation that improving industry fundamentals will boost the company’s EBITDA, the agency said.

The ratings also consider its 35% market share in the worldwide modular carpet segment, which has been growing faster than the rest of the floor covering market over the past decade, S&P said.

Tempering these strengths is the company’s participation in a highly competitive industry, the agency said, as well as its exposure to volatile raw material costs, particularly resins.

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