Fitch views First Brands negatively

Fitch Ratings said it changed its outlook for First Brands Group LLC to negative from stable and affirmed its BB- long-term issuer default rating. The agency concurrently affirmed FBG's secured asset-based lending revolver rating at BB+/RR1, first-lien secured term loan rating, which includes the planned €300 million non-fungible add-on, at BB+/RR2 and second-lien secured term loan rating at BB-/RR4.

“The revision of FBG's outlook to negative reflects the variable-rate debt the company has added over the past year, including the planned Euro term loan add-on. Although Fitch views FBG's business profile as consistent with the BB category, Fitch expects pro forma EBITDA interest coverage to decline to a level commensurate with the B category,” the agency said in a statement.

This add-on will be the third in 2023, after a $300 million increase in February and a $450 million increase in August. The proceeds are expected to be used to provide euro-denominated funds for potential acquisitions in the region.

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