The rating on Atlanta-based BWAY Holding Co. Inc. reflects Standard&Poor's Ratings Services' expectation of highly leveraged financial measures, which include funds from operations (FFO) to total adjusted debt of about 12% as of Dec. 31, 2011. It also reflects the company's very aggressive financial policies, exposure to volatile resin costs, and key industry risks, such as weak demand in the housing and industrial end markets. The company's good profitability and cash flow, market share gains from recent acquisitions, benefits from plant rationalization, favorably structured contracts, and cost-reduction efforts partly offset these weaknesses. We characterize BWAY's business risk profile as "fair" and its financial risk profile as "highly leveraged" (as defined in our criteria). BWAY, with annual sales of
