Fitch rates Associated Materials B, loans BB, B+

Fitch Ratings said it assigned New AMI I, LLC (Associated Materials) a B long-term issuer default rating following the acquisition of the company by funds managed by Strategic Value Partners (SVPGlobal).

Fitch also assigned a BB/RR1 to the company's $150 million asset-based lending facility and a B+/RR3 rating to its $550 million term loan B due 2029.

The outlook is stable.

In January, funds managed by SVPGlobal agreed to acquire Associated Materials for $950 million, or 6.6x multiple based on pro forma adjusted EBITDA of $144 million. The purchase was funded with a $550 million term loan B and $430 million equity contribution from SVPGlobal.

The agency said it estimates that Fitch-calculated total debt to operating EBITDA to be about 4.3x following the close of the acquisition. Fitch expects debt to EBITDA will fall to 4x at the end of 2022 on modest EBITDA growth and amortization of the term loan.

Fitch said its forecast for a softer demand environment in 2023 is expected to result in debt to EBITDA situating between 4x and 4.5x at year-end 2023, which would remain supportive of the B issuer default rating.

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