Moody's snips Spartech

Moody's Ratings said it downgraded TJC Spartech Acquisition Corp.'s corporate family rating to Caa1 from B3, probability of default rating to Caa1-PD from B3-PD and backed senior secured first-lien bank credit facilities to Caa1 from B3. The agency also changed the outlook to negative from stable.

"Spartech's credit metrics have deteriorated more than anticipated due to weakening demand across its portfolio, where there is material exposure to cyclical and discretionary consumer end markets," said Scott Manduca, a Moody's vice president, in a press release.

The agency noted Spartech is exposed to cyclical and discretionary end markets. Additionally, higher-for-longer interest rates, along with Spartech's EBITDA downturn, hurt cash flow generation and interest coverage. Furthermore, funds from operations turned negative last year and are projected to remain challenged in 2024.

The weaker outlook reflects an expectation of persistently negative funds from operations through 2024, increased dependency on the company's revolver and weak credit metrics, Moody’s said.

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