S&P ups ATS unsecured notes to BB-

S&P said it raised ATS Automation Tooling Systems Inc.’s senior unsecured notes to BB- from B+ and improved the recovery rating to 5 from 6. The 5 recovery rating corresponds with modest (10%-30%; rounded estimate: 20%) recovery in default. The agency also changed the company’s outlook to positive from stable and affirmed its BB issuer rating.

In a press release, S&P said it expects ATS’ “credit measures to steadily improve over the next couple of years to levels we view as strong for the rating, underpinned by higher earnings and positive free cash flow generation.”

The positive outlook mirrors the view that ATS can deliver and maintain “an adjusted debt-to-EBITDA ratio (leverage) of about 2.5x beyond this year, with steady organic growth in its life sciences, food and beverage, and transportation end markets,” the agency said.

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