Moody's views First Brands positively

Moody's Investors Service said it affirmed the ratings of First Brands Group, LLC, including its first-lien secured debt rating at B1 and second-lien secured debt rating at Caa1. The agency also revised the outlook to positive from stable.

“The change in the outlook to positive reflects Moody's expectation that cost savings will continue to materialize over the course of 2022. These initiatives will help offset higher input costs (including raw materials and freight) and keep the company's adjusted EBITA margin near 20% and improve adjusted debt to EBITDA between 4x––4.5x by the end of 2022 from around 5x (pro forma for LTM December 2021). First Brands has grown earnings during 2021 through the implementation and realization of many cost saving initiatives related to prior acquisitions,” the agency said in a press release.

Moody’s noted the planned $300 million fungible add-on to First Brands' first-lien term loan will increase leverage, it will also bolster the company's liquidity, which it views as very good.

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