S&P Global Ratings has upgraded AZZ Incorporated's issuer credit rating to 'BB' from 'BB-', citing accelerated debt repayment and sustained improvements in the company's leverage profile. The agency also raised its issue-level rating on the company's senior secured debt to 'BB+' from 'BB', while maintaining a '2' recovery rating. S&P-adjusted leverage fell to 1.4x in the first quarter of fiscal 2027, well below the agency's 2x threshold, after AZZ cut its adjusted debt load from roughly $1.3 billion following the debt-funded acquisition of Precoat Metals in fiscal 2023 to $550 million, including a $300 million reduction in fiscal 2026 alone. S&P expects AZZ to generate more than $200 million in free operating cash flow this year, funding roughly $30 million of bolt-on acquisitions year-to-date and annual capital expenditures of between $80 million and $100 million. The agency projects overall revenue growth of roughly 6% this year, led by a 12% expansion in the Metal Coatings segment during the first quarter, with the stable outlook reflecting expectations that leverage stays below 2x.
AZZ IncorporatedS&P upgraded AZZ's issuer credit rating to BB from BB- on accelerated debt repayment and improved leverage, a valuation/credit event.
S&P Global Inc