S&P upgrades Dometic

S&P said it raised the long-term corporate credit rating on Dometic Group AB to BB from BB-.

The agency also said it raised the rating on Dometic's Swedish krone 5.8 billion senior unsecured bank facilities to BB from BB-.

The recovery rating on these facilities is unchanged at 3, indicating 50% to 70% expected default recovery.

The outlook is stable.

The upgrade reflects an expectation that Dometic's improved margins should be sustainable and also assumes continued healthy sales growth during 2016 to 2017, based on favorable markets, S&P said.

The agency noted positively the company's focus on operating efficiency and focus on aftermarket sales.

Dometic has successfully delivered its financial policy since its initial public offering on the Stockholm stock exchange in November 2015, targeting a net debt-to-EBITDA ratio of about 2x and significantly strengthening its creditworthiness, S&P said.

The ratings are constrained by the company's moderate size and diversification compared with peers and its high concentration in mature markets, the agency said.

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