FastenTech’s Debt Dampens Credit Rating
FastenTech’s Debt Dampens Credit Rating
Jason Sandefur
Despite a 35% jump in revenue to $327.5 million during fiscal 2005, FastenTech’s credit rating was downgraded from stable to negative by Moody’s Investor Service. The shift affects about $345 million of debt securities for the specialty fastener manufacturer.
Minneapolis-based FastenTech saw organic sales increase 11%, while revenue from acquisitions added $59.5 million to net sales. But revenue wasn’t the reason for the downgrade.
“Operating margins, however, have been negatively impacted by an adverse shift in mix away from higher margin aerospace-grade components, increased raw material costs that were not passed through in the application-specific segment and generally lower margins at the acquired companies,” which include BNC and Erie Bolt, Moody’s reported.
According to Moody’s, FastenTech’s funded debt totals approximately $303 million, or 4.8 times EBITDA. Web: fastentech.com �2005/6 FastenerNews.com
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