Moody's upgrades Gestamp

Moody's Ratings said it upgraded to Ba2 from Ba3 Gestamp Automocion, SA’s €400 million of backed senior secured notes due 2026. The agency also raised the corporate family rating to Ba2 from Ba3 and the probability of rating to Ba2-PD from Ba3-PD. The agency concurrently changed the outlook to stable from positive.

"The upgrade of Gestamp's CFR to Ba2 reflects the group's continued strong organic top-line growth, stable profitability in a challenging market environment over the last two years and de-leveraging to an appropriate level for the Ba2 rating category in 2023," said Goetz Grossmann, a Moody's vice president, senior analyst and lead analyst for Gestamp, in a press release.

"The Ba2 CFR is also supported by Gestamp's solid liquidity and modest exposure to risks along the automotive industry's transition to electric vehicles," continued Grossmann.

Additionally, Gestamp's history of cutting its reported leverage to 1.5x net debt/EBITDA in 2023 from 2.3x in 2021, thereby reaching its target range of 1x-1.5x. Likewise, the group's Moody's adjusted leverage of 3.4x gross debt/EBTDA in 2023, which constantly decreased from 5x during the last two years, is now aligned with Moody's 3x-3.5x guidance for a Ba2 rating, the agency explained.

The stable outlook reflects Gestamp’s solid position in the Ba2 category, Moody’s said.

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