S&P upgrades RBC Bearings Inc.'s unsecured debt to 'BB+'

S&P Global Ratings has upgraded RBC Bearings Inc.’s (NYSE: RBC) unsecured debt rating to 'BB+' from 'B+', reflecting improved credit fundamentals and stronger financial performance. The upgrade follows the company’s voluntary debt repayments of $100 million during the quarter ended Dec. 28, 2024, which have enhanced recovery prospects for lenders and signaled disciplined capital management.

The 'BB+' rating applies to RBC Bearings’ $500 million in senior unsecured notes, with a recovery rating of '6', indicating a negligible (0%-10%; rounded estimate: 5%) recovery expectation in the event of a default. Meanwhile, the company’s senior secured credit facility, which includes a $500 million revolver and a $1.3 billion term loan A, was upgraded to 'BBB-' from 'BB+' in March 2025.

S&P Global Ratings maintains an issuer credit rating of 'BB' for RBC Bearings, with a positive outlook. The agency forecasts EBITDA growth and solid free cash flow generation, supported by strong demand for RBC Bearings’ highly engineered bearings and precision components, particularly in aerospace and defense markets. However, supply chain challenges and policy uncertainties remain risks to the base-case forecast.

The upgrade underscores RBC Bearings’ ability to manage leverage below 3x, on average, and its track record of voluntary debt repayments. S&P estimates a one-in-three chance that the company’s ratings could be raised within the next year, contingent on continued financial discipline and business performance.