JW Aluminum upgraded to B- by S&P Global Ratings as operations recover

JW Aluminum Continuous Cast Co. was upgraded by S&P Global Ratings on Jan. 13 to B-, from CCC+, with the agency citing operational issues related to fires in 2020 that are "largely behind" the company for the better rating. The company's $300 million of 10.25% senior secured notes due 2026 were upgraded to B- from CCC+, as well. JW's outlook was revised to stable, from developing.

S&P Global Ratings said that "underlying demand in the building, construction, transportation, HVAC and packaging sectors remains robust," while the company is also benefiting from having recovered from fires at its Mt. Holly facility and closures of its St. Louis and Williamsport sites within the past two years. Ratings anticipates earnings and profitability will "normalize this year," with a return to leverage in the 5x-6x range in 2022 and 2023.

The rating agency noted that a "key risk" facing JW is the concentration of production at Mt. Holly (roughly 80% of total production), as well as concentration in its end markets (HVAC and construction account for around 65% of total volume). Ratings added that JW's market position, coupled with the "commoditized nature of its products," limits its pricing power.

JW Aluminum manufactures flat-rolled aluminum products for the building, construction, transportation, HVAC and packaging sectors.