Moody's lowers RPM view to stable

Moody's Investors Service said it affirmed the Baa3 ratings of RPM International Inc. and changed the outlook to stable from positive.

The outlook revision reflects the extended period of higher leverage and the disparity between the upgrade triggers and actual metrics since the outlook was changed to positive in 2017, Moody's said.

The stable outlook also considers the modest risk to the balance sheet stemming from the company's share repurchase, dividend and mergers and acquisitions intentions through 2020, the agency said.

RPM's diversified portfolio of branded products continues to prove resilient while its entrepreneurial culture and mergers and acquisitions track record support a strong business model and the investment-grade rating, Moody's said.

The ratings continue to reflect the company's competitive advantage from leading brands, many of which enjoy leading market share positions, the agency said, and a diverse portfolio of products with good balance between consumer and industrial end markets.

The ratings also consider the company's No. 1 priority to protect the house, underscoring its commitment to the investment-grade rating, Moody's said.

Offsetting factors in the rating include the current high leverage, as well as exposure to cyclical construction markets, volatile raw materials and foreign-exchange exposure, the agency said.

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