Fitch upgrades Stabilus

Fitch Ratings said it upgraded Stabilus SA’s issuer default rating to B+ from B.

The outlook is stable.

The remaining €256.1 million senior secured notes issued by Servus Luxembourg Holding SCA also were upgraded to BB with recovery rating of RR2 from BB- with recover rating of RR2.

The upgrade reflects the reduction in funds-from-operations (FFO) adjusted leverage below the previously stated upgrade guidance of 4x, as well as expectations for further growth in revenues and EBITDA and continuous solid free cash flow in the foreseeable future, Fitch said.

The agency also said it expects Stabilus to exceed the previously stated upgrade guidance levels for FFO interest cover (3.5x) and fixed-charge cover (3x) in 2015 and beyond.

The stable outlook reflects the limited upgrade potential as the ratings are constrained by the company’s limited scale and diversification, Fitch said.

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