Newell Brands Inc.’s NWL credit rating was downgraded to “junk” status by S&P Global Ratings, which cited deteriorating credit metrics coupled with weaker demand for its products, and the company’s prioritizing of shareholder returns over debt reduction. Shares of the consumer brands company, with brands including Sharpie, Paper Mate and Graco, fell 0.2% in afternoon trading, paring earlier gains of as much as 2.5%. S&P cut its rating one notch to BB+, which is S&P’s highest speculative-grade, rating, from BBB-, which is S&P’s lowest investment-grade rating, and warned that further downgrades may be coming as the rating outlook was “negative.” S&P said Newell’s decision to repurchase $325 million worth of its stock in fiscal 2022, which reduced cash levels ahead of an economic slowdown, and the fact that it pays a $400 million a year in dividends despite generating negative cash flow suggests the company “is not committed to a financial policy that supports and investment-grade rating.” The stock has tumbled 49.2% over the past 12 months, while the S&P 500 SPX has lost 11.6%.
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