Chart Industries Upgraded by S&P Global Ratings, Demonstrating Strong Performance and Growth Following Howden Acquisition
Atlanta, March 11, 2024 - Chart Industries, Inc. (NYSE: GTLS), a prominent global provider of clean energy and industrial gas solutions, has recently received a credit rating upgrade from S&P Global Ratings (S&P). The rating agency has raised the issuer credit rating for Chart Industries to BB- from B+, with a stable outlook. Additionally, S&P has increased the issue-level ratings on Chart’s senior secured term loan and secured notes to BB- from B+, and on the unsecured notes to B+ from B. These upgrades reflect Chart Industries’ outstanding performance in meeting targets following the Howden acquisition, as well as its ability to achieve cost and commercial synergies, enhance EBITDA, generate free cash flow, reduce debt, and benefit from strong market demand.
The credit ratings upgrades by S&P Global Ratings highlight Chart Industries’ successful execution of its growth strategy and the positive impact of the Howden acquisition. Chart has effectively managed to exceed its objectives and capitalize on the associated financial benefits. The early realization of cost and commercial synergies has contributed to increased profitability and cash flow generation, further enhancing Chart’s financial stability.
One of the key drivers of the credit rating upgrade is Chart Industries’ robust financial performance, as evidenced by its increasing EBITDA, free cash flow, and ongoing debt reduction. These achievements demonstrate the company’s ability to effectively manage its operations and generate sustainable growth. Furthermore, Chart Industries has been able to capitalize on secular market tailwinds for increased demand in the clean energy and industrial gas markets, positioning itself as a leading global solutions provider in these industries.
While the credit rating upgrade is undoubtedly a positive development for Chart Industries, it is important to note that the company experienced a slightly lower return on average invested assets (ROI) in the fourth quarter of 2023 compared to its average ROI. The fourth-quarter ROI stood at 0.83%, while Chart’s average ROI is 1.12%. Although this discrepancy may raise questions about the company’s overall performance, it should be viewed in the broader context of Chart Industries’ impressive achievements following the Howden acquisition.
In conclusion, Chart Industries’ credit rating upgrade from S&P Global Ratings reflects the company’s strong performance and growth trajectory following the successful integration of Howden. The upgrades validate Chart’s execution against its targets, cost and commercial synergies, increasing EBITDA, free cash flow, and debt reduction. These developments, coupled with favorable market conditions, firmly establish Chart Industries as a leading player in the clean energy and industrial gas markets.
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