Guardian Industries Resources LLC

The stable outlook represents our view that Guardian will maintain adjusted leverage well below 2x on a sustained basis, with first quarter 2019 adjusted leverage of 1.2x. The company generates sufficient cash flow to repay debt. We could lower the rating if we determined that Guardian was no longer moderately strategic to Koch Industries or if Koch's stand-alone credit profile (SACP) was lowered from 'aa-'. Assuming no change to the Koch SACP, we could lower the rating on Guardian if leverage increased to over 2x on a sustained basis. This could occur if sales declined by 10% or EBITDA margins fell 400 basis points (bps) due to global recessionary pressure affecting the glass and auto markets. An upgrade of Guardian

...Guardian will maintain its strong market position as a leader in glass and auto trim. Guardian Industries Resources LLC is the world's fourth-largest producer of glass and the most profitable one. It has a global manufacturing footprint and serves diverse geographic markets in North America, Europe, the Middle East, Russia, Asia, and South America. It has a similar footprint in its auto trim business and provides products to most major international auto manufacturers. We expect Guardian to maintain strong credit metrics from fiscal 2019 and into 2020. We expect adjusted net debt to EBITDA well below 2x and strong EBITDA to interest coverage in excess of 15x over the next 12-24 months. The financial metrics are the result of conservative financial policies and lower debt than most other building materials producers. We expect the company to continue to deploy capital to invest in operations. Guardian has long been focused on stripping unnecessary costs out of operations, exiting unprofitable...

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