Moody’s cuts Interior Logic

Moody's Investors Service said it downgraded Signal Parent, Inc.'s (Interior Logic Group) corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD, the rating on the company's first-lien term loan due 2028 to B2 from B1 and the rating on its senior unsecured notes due 2029 to Caa2 from Caa1. The outlook was changed to stable from negative.

The rating action reflects persistent high debt leverage and operating margin pressure amid an expected modest weakening in end market conditions. Synergy and costs savings realization post the LBO transaction and the RDS acquisition in 2021 are taking an extended period of time, which is preventing the company from deleveraging of its balance sheet,” Moody’s said in a press release.

The improved outlook indicates the agency expects the company will keep a good liquidity profile, deliver positive free cash flow, and modestly improve its operating margin in the next 12 to 18 months.

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