S&P pares Pixelle

S&P said it downgraded Pixelle Specialty Solutions LLC’s issuer rating to B- from B and its bank debt borrowed by Spectrum Group Buyer Inc. to B- from B.

“The downgrade reflects the deterioration in Pixelle's credit metrics due to its weak demand and operational inefficiencies. The company generated S&P Global Ratings-adjusted EBITDA of $12 million for the first nine months of 2023 (compared with our expectation for about $86 million) and S&P Global Ratings-adjusted EBITDA margins of close to 1%.

“Therefore, we now expect its S&P Global Ratings-adjusted debt leverage will spike to near 19x for full-year 2023 before falling to the mid-8x area in 2024 (assuming a rebound in its earnings next year), which is a level that we do not view as commensurate with the B rating,” S&P said in a press release.

The outlook is negative.

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