Moody's: Stabilus notes B2

Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to Servus HoldCo Sarl, the holding company of the Stabilus group, and a provisional B2 rating to €315 million of senior secured notes to be issued by subsidiary Servus Luxembourg Holding SCA. The outlook is stable.

The agency said the B2 corporate family rating is mainly supported by Stabilus' very strong market position for gas springs across most geographical regions and end market applications in a very consolidated market environment, the high barriers to entry to Stabilus' markets, the group's geographically diversified and large-scale production base with a high level of automation in high-labor countries, the group's very broad product portfolio and its exposure to non-automotive related applications accounting for around 36% of total turnover, which should help to reduce overall cyclicality.

The rating of Stabilus remains constrained by the group's relatively small size, a geographical concentration on developed economies, the group's exposure to cyclical end industries, its capital intensity due to the high automation level of its production asset base and the group's high leverage, Moody's said. As of the end of fiscal 2012 in September, the pro forma adjusted debt-to-EBITDA ratio is around 5 times.

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