Moody's boosts Owens & Minor

Moody's Investors Service said it upgraded the ratings of Owens & Minor, Inc., including its corporate family rating to Ba3 from B1, its probability of default rating to Ba3-PD from B1-PD and its senior unsecured notes' rating to B1 from B2.

` Moody's also affirmed the rating on the senior secured credit facilities at Ba2. There is no change to the speculative grade liquidity rating of SGL-1, signifying very good liquidity. The agency also changed the outlook to stable from positive.

“The upgrade of the CFR reflects Owens & Minor's improved business profile mainly driven by strong operating performance and cash flow generation. The upgrade is also supported by an improvement in profitability and a reduction in leverage driven by earnings growth, with adjusted debt/EBITDA of 2.1x for the 12 months ended June 30, 2021 (vs. 3.2x December 31, 2020). Owens & Minor has benefitted from strong demand in the company's manufacturing business, which produces personal protective equipment (PPE) used to prevent the transmission of coronavirus and other infectious diseases,” the agency said in a press release.

The stable outlook reflects an expectation that financial leverage will remain between 2x and 3x over the next 12 to 18 months, Moody’s said.

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