S&P gives negative view to AAG FH

S&P said it affirmed AAG FH LP’s B- ratings, removed them from CreditWatch with negative implications and assigned a negative outlook. The agency put the ratings on watch on April 16.

“The affirmation and removal from CreditWatch primarily reflect AAG’s better liquidity position than we had expected in April 2020. AAG’s sales, earnings, and cash flow generation in the first half of the year have been trending better than we had previously expected,” S&P said in a press release.

The agency now expects revenue and adjusted EBITDA to be down 20%-30% in 2020 and recover to near 2019 levels within the next two years.

“The negative outlook reflects the risk that the expected recovery in auto sales could stall due to the pandemic, potentially leading to weaker interest coverage ratios or liquidity,” S&P said.

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