Fitch gives Worthington Industries BBB-

Fitch Ratings said it gave a first-time BBB-(EXP) issuer default rating to Worthington Industries, Inc. (WOR). The agency also assigned BBB-(EXP) ratings for WOR's senior unsecured bank facility and notes. The outlook is stable.

“The expected ratings reflect the pro forma credit profile of Worthington Enterprises, the renamed Worthington Industries after the planned separation of its steel processing business into an independent, publicly listed company. Conversion of the expected ratings to final ratings is contingent on the completion of the planned separation and associated debt repayment plans, expected in December 2023,” Fitch said in a press release.

Worthington Steel’s separation is expected to be completed in December. The remaining business (Worthington Enterprises) is less cyclical, less capital-intensive with lower working capital requirements, Fitch said.

“The ratings are constrained by Worthington Enterprises' smaller EBITDA scale and more concentrated product offering relative to investment-grade peers, with Fitch-forecasted fiscal 2025 EBITDA of around $140 million from consolidated operations, and a similar amount in dividends from its two JVs. Revenues are also concentrated across several key product categories and several large customers,” Fitch said.

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