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Sep 24, 11:42 PM
S&P Global Ratings upgraded AZZ’s issuer credit rating to BB from BB-, citing faster debt repayment and sustained improvements in leverage. The agency also raised its senior secured debt rating to BB+ from BB, with a recovery rating of 2.
AZZ’s S&P-adjusted leverage fell to 1.4x in fiscal Q1 2027, well below the agency’s 2x threshold. Since its debt-funded acquisition of Precoat Metals in fiscal 2023, AZZ has reduced adjusted debt from about
$1.3 billion to
$550 million, including a
$300 million reduction in fiscal 2026.
S&P expects AZZ to generate more than
$200 million in operating free cash flow this year, supported by lower interest expense and margin expansion. Management is targeting net leverage of 1x-2x while resuming bolt-on acquisitions, with about
$30 million spent so far this year and annual capital spending rising to
$80 million-
$100 million.
Data-center construction and public infrastructure spending continue to offset weakness in commercial and residential markets.
$AZZ
