Moody’s cuts Associated Materials

Moody's Investors Service said it downgraded New AMI I, LLC's (Associated Materials) corporate family rating to B3 from B2.

At the same time, Moody's downgraded the probability of default rating to B3-PD from B2-PD and the rating on its senior secured first-lien term loan to B3 from B2.

The outlook remains stable.

“The downgrade reflects the company's aggressive financial policies, including a dividend to the sponsor funded through a sale-leaseback of facilities during a period of elevated leverage and significant spending on operational initiatives,” Moody’s analyst Nirali Patel said in a news release.

“Currently, credit metrics are pressured with Moody's-adjusted leverage above 9x as of LTM April 2023 and weak interest coverage. Uncertainty in macroeconomic performance as well as declines in new home construction will mean challenging demand conditions in the near-term for Associated Materials.”

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