Moody's downgrades Akzo Nobel

Moody's Investors Service said it downgraded Akzo Nobel NV's senior unsecured rating to Baa2 from Baa1 and its backed senior unsecured notes and senior unsecured euro medium-term note program to Baa2 from Baa1 and (P)Baa2 from (P)Baa1, respectively. Concurrently, Moody's changed the outlook to stable from negative

“The downgrade reflects Akzo Nobel's high point-in-time leverage, as well as Moody's expectations that the deleveraging trajectory will not be commensurate with a Baa1 rating, in particular as the company is likely to refinance some short-term debt and fund cash outflows with long-term debt, resulting in an enduring change of its capital structure,” the agency said in a press release.

Moody's said it projects Akzo Nobel's Moody's adjusted EBITDA in 2022 is slightly above €1 billion, resulting in Moody's adjusted gross leverage of around 6x. The agency noted that AkzoNobel’s gross and net leverage are high for the Baa2 rating, but it expects to see leverage retreating to below 4x in 2024.

“The stable outlook on Akzo Nobel's ratings reflects Moody's expectation that the company will demonstrate its ability to substantially reduce Moody's adjusted gross leverage over the next 12-18 months. The stable outlook also reflects Moody's expectation that the company will prudently manage its liquidity profile including its short-term debt maturities,” the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.