Fitch trims Flender loan rating

Fitch Ratings said it lowered Flender International GmbH's senior secured term loan rating to B from B+ and revised its recovery rating to RR4 from RR3 due to the company's higher usage of non-recourse factoring.

The agency said it also revised the outlook to stable from negative and affirmed the B issuer rating.

“The outlook revision and rating affirmation reflect our forecast improvement of free cash flow (FCF) generation from FY24 (year-end September), supported by sustainable EBITDA margins and lower capex after the company reported better-than-expected operating margins in FY23. Lower inflationary pressure and better profitability on contracts should support Flender's cash flow generation and deleveraging capacity over our forecast horizon to FY27,” Fitch said in a press release.

The agency said it expects sustainable Fitch-defined EBITDA margins at 10.5%-11.5% during FY24-FY27, which are marginally higher than FY22-FY23 levels, buoyed by lower inflation and better margins on contracts.

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