Moody’s lifts HP Pelzer, notes

Moody's Investors Service said it upgraded HP Pelzer Holding GmbH’s corporate family rating to B1 from B2, probability of default rating to B1-PD from B2-PD and €280 million senior secured note rating to B1 from B2.

The outlook remains stable.

"Today's rating action reflects a material strengthening of key credit metrics of HP Pelzer since its first-time rating assignment in 2014," Oliver Giani, Moody's vice president, senior analyst and lead analyst for HP Pelzer, said in a news release.

"Over the past two years HP Pelzer was able to significantly improve its profitability on the back of strong cost control and a higher focus on profitable contracts. This resulted in overall stable leverage around 3.5x despite a tap issue in 2015."

“On the back of strengthened profitability cash flow generation continuously improved, allowing HP Pelzer to meet our upgrade triggers such as its EBITA margin to improve to above 4.5% (6.3% as per LTM period ending March 2016), debt/EBITDA below 3.5x (3.5x as per LTM period ending March 2016), and positive free cash flow generation (€15 million as per LTM period ending March 2016),” Giani added in the release.

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