Whirlpool Corp. reported a steep profit decline in the first quarter, eliminated its dividend, and received a waiver on testing its revolving credit facility interest coverage covenant. It must replace the revolving facility before July 1, 2026. We expect the company will execute an asset-based loan (ABL) agreement over the coming weeks, which will permit sufficient flexibility to fund operations. We assume U.S. consumer spending on large appliances will rebound after dropping in the first quarter. We also believe the company will benefit from revisions to section 232 steel tariffs. Nevertheless, free operating cash flow (FOCF) will remain weak. While we expect credit metrics to improve, the company will likely remain highly leveraged, with S&P Global Ratings-adjusted leverage of 6.4x
