Moody’s upgrades GKN Holdings to Baa3

Moody's Investors Service said it upgraded the senior unsecured ratings of GKN Holdings plc, to Baa3 from Ba1.

The outlook is stable.

GKN Holdings is the finance, investment and holding company of GKN Group.

The action was prompted by the swift improvement in credit metrics, which GKN Group has achieved since the acquisition of Volvo Aero in October 2012 as reflected by the generation of solid profit margins, consistently positive free cash flow and subsequent debt and leverage reduction.

"We have upgraded GKN back to investment grade in consideration of a solid operating performance in combination with a financial policy balancing the interests of shareholders and lenders," Oliver Giani, Moody's lead analyst for the European automotive supplier industry, said in a news release.

"Looking ahead we expect to see a further gradual strengthening of GKN's credit profile which will allow the group to maintain credit metrics that are in line with Moody's expectations for an investment grade rating."

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