Research Update: International Flavors&Fragrances Inc. Downgraded To 'BBB-/A-3' From 'BBB/A-2' On Still-High Leverage; Outlook Stable

U.S. -based Flavors and Ingredients manufacturer International Flavors&Fragrances Inc.'s (IFF) leverage remains higher than expected following its 2021 acquisition of Nutrition and Biosciences Inc. (N&B; not rated), including pro forma debt to EBITDA of 4.1x for the 12 months ended June 30, 2022. New management is prioritizing operating efficiencies and asset sale proceeds to restore margins and reduce leverage but may face challenges due to a slowing economy, strong U.S. dollar, and difficult financial market conditions to execute asset sales. We lowered all ratings on IFF, including its issuer credit rating to 'BBB-' from 'BBB' and its short-term commercial paper rating to 'A-3' from 'A-2'. The stable outlook reflects our expectation for margins to modesty improve from ongoing

...- U.S. -based Flavors and Ingredients manufacturer International Flavors & Fragrances Inc.'s (IFF) leverage remains higher than expected following its 2021 acquisition of Nutrition and Biosciences Inc. (N&B; not rated), including pro forma debt to EBITDA of 4.1x for the 12 months ended June 30, 2022. - New management is prioritizing operating efficiencies and asset sale proceeds to restore margins and reduce leverage but may face challenges due to a slowing economy, strong U.S. dollar, and difficult financial market conditions to execute asset sales. - We lowered all ratings on IFF, including its issuer credit rating to '###-' from '###' and its short-term commercial paper rating to 'A-3' from 'A-2'. - The stable outlook reflects our expectation for margins to modesty improve from ongoing cost savings and less input cost inflation and for leverage to slowly decline near or below 4x prior to any possible asset sales that could further reduce leverage....

Research Update