Fitch Ratings assigned Installed Building Products, Inc. (IBP) a first‑time long‑term issuer default rating of ‘BB+’ on December 1, 2025, reflecting the company’s conservative leverage profile, strong cash‑flow generation, and healthy liquidity position. The rating comes with a stable outlook, indicating Fitch expects IBP’s credit standing to remain unchanged in the near term.
IBP’s rating case highlights several key financial metrics. As of September 30, 2025, the company held $330 million in cash and had $246.5 million of available credit under its $250 million asset‑backed loan (ABL) revolver. EBITDA leverage has trended below 2.0× since 2022, and Fitch forecasts it to remain between 1.5× and 2.0× through 2027, providing substantial rating headroom. EBITDA margins are projected to stay in the 16‑17% range, while free‑cash‑flow margins are expected to be 6‑7% in 2025 and 2026.
The rating also includes specific credit facility assessments: a ‘BBB‑’ recovery rating with an ‘RR1’ rating for IBP’s ABL credit facility, a ‘BBB‑/RR2’ rating for its senior secured term loan, and a ‘BB+/RR4’ rating for its senior unsecured notes. These sub‑ratings underscore Fitch’s view that IBP’s debt structure is well‑secured and that recovery prospects are solid, even in a downturn.
IBP’s business model is heavily tied to the new‑construction cycle, with roughly 72% of 2024 revenue coming from new residential construction. Fitch notes that during the last downturn, IBP’s revenues fell 44% from peak to trough, while housing starts fell 73%. The company mitigates this cyclicality through a diversified product portfolio and a focus on bolt‑on acquisitions funded primarily with free cash flow, avoiding large debt‑funded deals that could strain leverage. Recent acquisitions, such as Capital Insulation and Euroview Enterprises, added over $100 million in annual revenue and broadened IBP’s geographic reach.
The ‘BB+’ rating places IBP in the non‑investment‑grade, speculative category, but it still signals a solid financial footing. Fitch’s stable outlook suggests confidence in IBP’s ability to maintain its leverage and liquidity targets. For investors, the rating provides a formal assessment that could influence future borrowing costs and market perception of IBP’s creditworthiness.
The rating action is the most significant new event for IBP reported on December 1, 2025, and it has not been previously covered by this outlet. The announcement offers a comprehensive view of IBP’s financial health, risk profile, and strategic direction, making it a valuable update for stakeholders and long‑term investors.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.