Moody's lifts Eco-Bat view to positive

Moody's Investors Service said it changed Eco-Bat Technology Ltd.'s outlook to positive from stable following continued buoyant financial results for the third quarter of 2006 and improving credit metrics.

The change in outlook reflects Moody's expectation that the credit profile should continue to improve within the B1 rating category. Cash flows have been robust, the company has had little need to draw on bank debt and liquidity and financial flexibility are also expected to improve if performance is maintained.

The agency said that while Eco-Bat does not specify a target financial profile and is sensitive to LME lead prices and cyclicality in demand, the company has benefited from higher lead prices and this has allowed it to build an improved financial profile to better manage through cyclical downturns. This is also aided by growing diversification through increased non-lead operations.

Nevertheless, Moody's said the ratings continue to be constrained by the volatility of lead price, environmental risks and event risk, particularly the possibility of further acquisitions.

Total debt to EBITDA on a last-12-month basis to Sept. 30 was around 3.5x.

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