Standard & Poor's Ratings Services on Friday lowered its ratings outlook for Clorox to "Negative" from "Stable," saying it expects the cleaning products producer to adopt a more aggressive financial policy and increase its debt leverage.
However, the agency upheld its "A-" corporate credit rating, "A-" senior unsecured debt rating and "A-2" short-term and commercial paper ratings on the company.
Clorox said Thursday it is comfortable running its business at three times its total debt to EBITDA, or earnings before interest, taxes, depreciation and amortization, buttressed by its ability to generate free cash. S&P noted that such an increase would be well above its current debt leverage of 2.2 times EBITDA, and very weak for the current ratings.
