Moody's boosts Gestamp

Moody's Investors Service said it upgraded Gestamp Automocion, SA’s corporate family rating to Ba3 from B1, its probability of default rating to Ba3-PD from B1-PD and its guaranteed senior secured instrument rating to Ba3 from B1. The agency changed the outlook to stable from positive.

"The upgrade reflects continued improvements of Gestamp's operating performance and further confirmation of its focus on capex moderation, higher free cash flow generation and leverage reduction. This increases visibility of the company's achieving credit metrics in line with a Ba3 rating over the next 12-18 months," said Falk Frey a Moody's senior vice president and lead analyst for Gestamp, in a press release.

The outlook reflects the expectation that Gestamp's debt/EBITDA (Moody's adjusted) will retreat to well below 5x for the fiscal year and decline further to well under 4x in 2022, while Moody's adjusted EBITA margins should improve to above 5% by 2021 and exceed 6% in 2022.

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