AZZ AZZ Inc

S&P Global Ratings upgraded AZZ’s issuer credit rating to BB from BB-, citing faster debt repayment and sustained improvements in leverage. The agency also raised its senior secured debt rating to BB+ from BB, with a recovery rating of 2. AZZ’s S&P-adjusted leverage fell to 1.4x in fiscal Q1 2027, well below the agency’s 2x threshold. Since its debt-funded acquisition of Precoat Metals in fiscal 2023, AZZ has reduced adjusted debt from about $1.3 billion to $550 million, including a $300 million reduction in fiscal 2026. S&P expects AZZ to generate more than $200 million in operating free cash flow this year, supported by lower interest expense and margin expansion. Management is targeting net leverage of 1x-2x while resuming bolt-on acquisitions, with about $30 million spent so far this year and annual capital spending rising to $80 million-$100 million. Data-center construction and public infrastructure spending continue to offset weakness in commercial and residential markets. $AZZ