S&P rates MTU Aero Engines

Standard & Poor's said it assigned its BB long-term corporate credit rating to MTU Aero Engines Holding AG (MTU), the ultimate parent company of the MTU group, following the group's recent IPO. The outlook is stable.

In addition, S&P assigned its BB long-term corporate credit and B+ subordinated debt ratings to related entity, MTU Aero Engines Investment GmbH. The outlook is also stable.

At the same time, S&P removed its ratings, including its BB- long-term corporate credit rating, on MTU Aero Engines GmbH from CreditWatch with positive implications and withdrew the ratings.

MTU's commercial businesses appear to have stabilized and the group should be able to improve operating profit and cash flows due to the growing recovery in international passenger and cargo traffic, the agency said.

The ratings, however, continue to reflect the group's below-average business profile, which is constrained by the group's reliance on the cyclical civil aviation industry, vulnerability to the weakness of the dollar, and still aggressive financial profile.

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