Moody's upgrades Gates Global

Moody's Investors Service said it upgraded Gates Global LLC's ratings, including the corporate family rating and probability of default rating to B1 and B1-PD from B2 and B2-PD, respectively. Concurrently, the agency raised the ratings on Gates' senior secured bank credit facilities to Ba3 from B1 and senior unsecured notes to B3 from Caa1. Moody's also upgraded the company's speculative grade liquidity rating to SGL-1 from SGL-2.

“The upgrade of the CFR to B1 is based on Moody's expectation that Gates will maintain a well-balanced financial policy resulting in debt to EBITDA around 3.5x and EBITDA margin at about 22%. The company is demonstrating strong operating performance and maintaining very good liquidity as many of the company's markets rebound, despite supply chain and inflationary cost pressures. The company's track record of debt repayment (about $422 million over the past 24 months) and Moody's expectation that the company will continue to generate strong annual free cash flow also support the upgrades,” the agency said in a press release.

The outlook is stable.

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