Italian premium and luxury leather supplier Leather S.p.A., holding company of Conceria Pasubio (Pasubio), continues to face weak demand in its automotive segment, resulting in lower volumes that weigh on earnings and credit metrics in 2025 and 2026. Although recent acquisitions in the fashion leather segment will support earnings, we now expect S&P Global Ratings-adjusted debt to EBITDA will exceed 7.0x in 2025-2026, with weaker free operating cash flow (FOCF) than we previously forecasted. We therefore lowered our ratings on Leather and its floating-rate senior secured notes to 'B-' from 'B'; the recovery rating on the debt remains at '4' reflecting our expectation of 35% recovery in the event of a default. The stable outlook reflects our expectation that Pasubio
