Fitch rates Reynolds Consumer loans BBB-

Fitch Ratings said it assigned Reynolds Consumer Products LLC’s first-lien secured facilities, including its $250 million revolver and $2.48 billion term loan BBB-/RR1 ratings. The agency also assigned Reynolds and its parent Reynolds Consumer Products Inc. a BB+ first-time issuer default rating.

“Reynolds' rating reflects its leading market position in the categories in which it participates, its strong innovation pipeline, and Fitch's expectation that Reynolds will reduce Fitch-calculated leverage (total debt/EBITDA) to the low-3x area over the next 24 months, given strong cash flows and EBITDA recovery. The company's exposure to raw material prices resulted in recent earnings volatility and a meaningful contraction in its margins. Fitch expects EBITDA margins to recover gradually to a mid-17% level by 2024, with price increases and easing of commodity pressures,” Fitch said in a press release.

The outlook is stable.

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